📝 Test Yourself
Financial Systems Assessment: Test your understanding of money functions, banking operations, credit systems, and formal/informal sources of credit. This evaluation covers monetary economics, banking reforms, and credit access issues.
📋 Testing Protocol
Complete without financial calculator or reference materials
Focus on distinguishing between different financial instruments
Note banking terms and credit assessment parameters
Review errors to identify conceptual misunderstandings
Target score: 42+ indicates solid financial literacy
Money & Credit Systems Test (1 Mark Each)
Question Distribution: 1-15: Money functions & history | 16-30: Banking operations | 31-40: Credit systems & terms | 41-50: Formal vs informal credit
- Money acts as a __________ of exchange.
- Money eliminates the need for __________ exchange.
- Money serves as a __________ of value.
- Money is used as a standard for __________ payments.
- The modern forms of money include __________ and __________.
- Currency is issued by the __________ of the country.
- Deposits in bank accounts are also called __________ money.
- Cheques are used to settle payments without using __________.
- The Reserve Bank of India supervises the functioning of __________ sources of credit.
- The double coincidence of wants is a problem in the __________ system.
- Before the introduction of coins, a variety of objects were used as money like __________, __________, and __________.
- Modern currency is not made of __________ but still accepted as money.
- Currency is accepted as a medium of exchange because it is authorized by the __________.
- Banks keep only a small proportion of deposits as __________ with themselves.
- Banks use the major portion of deposits to extend __________.
- People deposit money with banks for __________.
- Banks accept deposits and pay __________ on deposits.
- Banks mediate between those who have surplus funds and those who need __________.
- Banks charge a higher interest rate on __________ than they offer on __________.
- The difference between what is charged from borrowers and paid to depositors is the main __________ of banks.
- __________ is an asset that the borrower owns and uses as a guarantee to the lender.
- Terms of credit include __________ rate, __________, and __________.
- The __________ supervises the credit activities of lenders in the informal sector.
- SHGs stands for __________.
- NABARD was set up in __________ as an apex body to coordinate rural financing.
- Cheques are orders to banks to pay a specific amount from a person's account to the __________.
- Demand deposits are also called __________ money.
- The cash reserve ratio is the percentage of deposits that banks must keep as __________.
- __________ loans are those where lenders demand collateral.
- __________ loans do not require collateral.
- Credit means __________ with the promise of future repayment.
- In rural areas, the main demand for credit is for __________ purposes.
- Crop production involves considerable costs on __________, __________, etc.
- __________ credit is available from banks and cooperatives.
- __________ credit includes moneylenders, traders, etc.
- The __________ of the borrower is crucial in obtaining credit.
- Loans from banks and cooperatives are called __________ sector loans.
- __________ is required as security against loans.
- Interest rate, collateral, and documentation are part of __________ of credit.
- Higher cost of borrowing means a larger part of earnings is used to repay the __________.
- Formal sector loans need to expand so that dependence on __________ credit decreases.
- __________ have higher interest rates compared to formal sector loans.
- Most loans from informal lenders carry very high interest rates and have __________ terms.
- __________ are an important source of cheap credit in rural areas.
- Banks are not present everywhere in __________ areas.
- __________ are necessary for obtaining loans from banks.
- __________ do not require collateral and aim to create self-employment.
- The RBI monitors banks in actually maintaining __________ balance.
- __________ are organizations of rural poor that pool savings and give loans.
- The __________ system helps people to obtain loans from banks.
📊 Answer Key & Financial Analysis
PART A: Money Functions (1-15)
- medium
- barter
- store
- deferred
- currency, deposits
- government
- digital
- cash
- formal
- barter
- grains, cattle, precious metals
- precious metal
- government
- cash
- loans
PART B: Banking (16-30)
- safety
- interest
- funds
- loans, deposits
- income
- Collateral
- interest, collateral, documentation
- Reserve Bank of India
- Self Help Groups
- 1982
- person in whose name cheque is made
- plastic
- reserve
- Secured
- Unsecured
PART C: Credit Systems (31-40)
- loan
- agricultural
- seeds, fertilizers, pesticides
- Formal
- Informal
- creditworthiness
- formal
- Collateral
- terms
- loan
PART D: Formal/Informal (41-50)
- informal
- Informal loans
- unfair
- Cooperatives
- rural
- Documents
- Microcredit
- cash
- SHGs
- collateral
| Score Band | Financial Literacy | Focus Areas |
|---|---|---|
| 46-50 | Advanced | Banking operations and credit assessment |
| 41-45 | Proficient | Formal-informal credit distinctions |
| 35-40 | Good | Basic money functions and banking terms |
| 28-34 | Satisfactory | Key terminology and simple concepts |
| Below 28 | Needs Revision | Fundamental money concepts and banking basics |
💳 Chapter Mastery Strategy
Function Charts: Create diagrams showing four functions of money with examples
Banking Flowchart: Draw process of credit creation by banks with percentages
Comparative Table: Make table comparing formal and informal credit sources on 5 parameters
Terminology Cards: Create flashcards for key terms: collateral, credit, interest, SHGs, NABARD
Current Context: Link to digital banking, UPI, and financial inclusion initiatives
Exam Weightage: This chapter carries 6-8 marks. Expect questions on money functions, banking operations, formal/informal credit comparison, and SHGs. Diagram-based questions on credit creation process are common.
