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Money and Credit
Social Science · CBSE Class 10 · English Medium · 20 questions and answers
Sample questions
- Q: What is a double coincidence of wants?
- A: In a barter system where goods are directly exchanged without money, both parties have to agree to sell and buy each other's commodities; this is known as double coincidence of wants.
- Q: How does money solve the problem of double coincidence of wants?
- A: Money acts as a medium of exchange; a person holding money can easily exchange it for any commodity or service, so money removes the need for a double coincidence of wants.
- Q: What is a medium of exchange?
- A: Money is a medium of exchange because it acts as an intermediate in the exchange process; it is used to buy and sell goods and services without the need for direct barter.
- Q: What is currency and who issues it in India?
- A: Currency (paper notes and coins) is modern money that is not made of precious metal; in India, the Reserve Bank of India (RBI) issues currency notes on behalf of the central government.
- Q: Why is currency accepted as a medium of exchange?
- A: No individual can refuse a payment made in rupees in India because the currency is authorised by the government of the country; the law legalises its use as a medium of payment.
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