Chapter 1

Development

Mortality

Developing or middle Low-income

income country per capita countries per capita
more than 49300$ income between
income less than
2500$ per annum
2500$-49300$

X – Social Science 284

Main points of the chapter:

1. Development:- Development is generally defined as growth. Some

of the important goals are - seeking more income, equal treat-
ment, freedom, security, and respect from others.

2. Different people have different development goals. What may be

development for one May not be for the other. It may be destruc-
tive for the other.

3. One would consider earning more income, being a common fac-

tor among people. With this income, they buy services and goods
for their daily needs.

4. Per capita Income = Total National Income/Total Population

For comparing countries, their Income is considered to be one

of the most important attributes.

5. National development refers to the ability of a nation to improve

the lives of its citizens. Measures of improvement may be mate-
rial, such as availability of healthcare etc.

6. Sustainable Development is development that meets the needs

of the present without compromising the ability of future genera-
tions to meet their own needs.

7. Human Development Index is a composite statistic of life ex-

pectancy, education and per capita income indicators, which
are used to rank countries in four tires of human development.

285 X – Social Science

 8. Infant Mortality Rate can be defined as total number of children
that die before the age of one year our of 1000 live children born
in that particular year.

9. Literacy rate can be defined as proportion of literate population

in the age group of 7 years & above.

10. Net attendance Ratio can be defined as the total number of

children of 6-10 years age group attending school out of total no.
of children in the same age group.

Total Income from all the sectors

11. Per capital income = Total Population

Total National Income

= Total Population

12. BMI can be calculated by taping the weight of a person (kgs) &
height (mtr) then divide the weight by the square of the height of
a person.

13. HDI (Human Development Index) Rank of India in the World is

131.

X – Social Science 286

Multiple Choice Questions

1. Life expectancy at birth means:

(a) average expected length of life of a person at the time of birth

(b) average expected length of life of a person at the time of death

(c) average expected length of a child at the time of birth

(d) None of the above

2. Which one among the following is a developmental goal for the and
less rural labourers?

(a) To get luxury car

(b) To send their children abroad

(c) More days of work and better wages

(d) To shift to the cities

3. Which of the following statements about money are true?

(a) Money cannot buy you a pollution-free environment.

(b) Money cannot ensure that you get unadulterated medicines.

(c) Money may also not be able to protect you from infectious dis-
eases.

(d) All of the above.

4. In which state in India is the infant mortality rate lowest?

(a) Kerala (b) Bihar

(c) Haryana (d) Punjab

287 X – Social Science

 5. Per capita income of a country can be calculated by:

(a) the total income of a person

(b) the total exports of the country.

(c) the total value of all goods and services

(d) by dividing the national income by the total population of a

country

6. One common development goal among the people is:

(a) income (b) family

(c) freedom (d) Big House

7. If the Body Mass Index (BMI) ________, then the adult person would
be considered overweight.

(a) more than 18 (b) more than 30

(c) more than 45 (d) more than 25

8. Among the following states, _________ has the highest per capita
income as per 2012-13 figures.

(a) Maharashtra (b) Bihar

(c) Kerala (d) Jharkhand

9. Proportion of literate population in the 7 years and above age group

is termed as

(a) Education index (b) Mortality ratio

(c) Literacy rate (d) Gross enrolment ratio

X – Social Science 288

10. The developmental goal for a girl from a rich family is:

(a) to get more days of work

(b) to get better wages

(c) to get as much freedom as her brother gets

(d) to get electricity

11. Which one of the following is a developmental goal for industrialists?

(a) To get more days of work

(b) To get better wages

(c) To get more electricity

(d) All the above

12. Which one of the following criteria is the basis to measure the devel-
opment of a country according to UNDP?

(a) Per capita income

(b) Educational levels of the people

(c) Health status of the people

(d) All the above

13. Read the below statements carefully:

1. Literacy rate can be defined as proportion of literate population

in the age group of 10 years.

2. Different persons could have different as well as conflicting no-

tions of a country’s development.

289 X – Social Science

 3. Net Attendance Ratio is the total number of children of age group
7 and 10 years attending school as a percentage of total number
of children in the same age group.

4. Money in your pocket cannot buy all the goods and services that
you may need to live well.

Choose the correct statement:

(a) 1 and 2 only (b) 1 and 3 only

(c) 2 and 3 only (d) 2 and 4 only

14. Which one of the following states has the highest Human
Development Index (HDI)?

(a) Kerala (b) Punjab

(c) Uttar Pradesh (d) West Bengal

15. Kerala has low Infant Mortality Rate because:

(a) it has good climatic condition

(b) it has adequate infrastructure

(c) it has adequate provision of basic health and educational

facilities

(d) it has poor net attendance ratio

16. Human Development Index compares countries based on which of

the following levels of the people?

(a) Educational level (b) Health status

(c) Per capita Income (d) All the above

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17. Which of the following resources is a non-renewable energy resource?

(a) Solar radiations (b) Coal

(c) Wind energy (d) Geo thermal energy

Directions- In the questions given below, there are two statements

marked as Assertion (A) and Reason (R). Read the statements and choose
the correct option:

A. Both A and R are true and R. is the correct explanation of A.

B. Both A and R are true and but R is not the correct explanation of A.

C. A is correct and R is Incorrect.

D. Both A and R are incorrect

18. Assertion(A): A high average income is not indicative of the overall

well-being of a country.

Reason(R): Average income does not cover human development,

like level of education, health and public facilities.

19. Assertion(A): A country at present has very high national income

due to surplus oil resources. However, it is essential to look for alter-
native sources of income also.

Reason(R): Oil is a natural resource that is renewable in nature.

20. Assertion(A): Sofiya works 5 days a week, receives her income on

a last day of each month and gets medical facilities from her firm.

Reason(R): Sofiya is working in an organised sector.

291 X – Social Science

Answer key

1. (a) average expected length of life of a person at the time of birth

2. (c) More days of work and better wages

3. Option (d)

4. (a) Kerala

5. (d) by dividing the national income by the total population of a country

6. (a) income

7. Option (d)

8. Option (a)

9. (c) Literacy rate

10. (c) to get as much freedom as her brother gets

11. (c) To get more electricity

12. (d) All the above

13. (d) 2 and 4 only

14. (a) Kerala

15. (c) it has adequate provision of basic health and educational

facilities

16. (d) All the above 17.(b) Coal

18. A. Both A and R are true and R. is the correct explanation of A.

19. C. A is correct and R is Incorrect.

20. A. Both A and R are true and R. is the correct explanation of A.

X – Social Science 292

2/3/5 Marks Questions

1. What do you mean by per capita income?

2. What would be the developmental goals for an Adivasi from Narmada

valley?

3. Suggest any two ways to improve health and nutritional status of

people in India.

4. What are the important goals of people?

5. What does the term Infant Mortality Rate indicate?

6. What is Net Attendance Ratio?

7. Name two things which you cannot buy with money.

8. Mention three components of Human Development Index or HDI.

9. What is Human Development Index or HDI?

10. ‘What may be development for one may not be development for the
other’. Explain by giving examples.

11. What is per capita income? What are the limitations of the per capita
income criteria of development?

12. A part from income, which other six things’ people look for as
important aspects of our lives?

13. Mention various factors that determine the development of a country.

14. Mention any five conditions or aspects that one would consider
before accepting a job.

15. Explain the importance of sustainable development with reference to

groundwater by giving example. (HOTS)

293 X – Social Science

 16. Why does Kerala have a better Human Development Index ranking in
comparison to Punjab? Explain with three reasons.

17. Define the following terms:

(i) Infant Mortality Rate

(ii) Literacy Rate

(iii) Net Attendance Ratio

18. Highlight any three advantages of public facilities.

Answer key

1. See the main points of the chapter.

2. A permanent source of livelihood, access and control over resources,

a ‘ local school to provide quality education to his/her children, etc.

3. Adequate provision of basic health, education and food grains.

4. Equal treatment, freedom, security and respect of others. They re-

sent discrimination.

5. See the main points of the chapter.

6. See the main points of the chapter.

7. See the main points of the chapter.

8. See the main points of the chapter.

9. See the main points of the chapter.

10. Construction of dams may be beneficial for industrialists and large

rarmers but this may submerge the agricultural land, and disrupt the
lives of the people.

X – Social Science 294

 – More wages mean development for a worker, but it can go against
the employer.

– A consumer wants to purchase different household articles at low

prices but a trader or seller wants to sell these items at a higher
price.

11. The total income of a country divided by its total population is called
per capita income.

Limitations of per capita income

(i) Per capita income is the average income of a country.

(ii) Per capita income criteria take into account only the economic
aspect of life and ignores the social, aspect of life.

(iii) Per capita income criteria ignore education, health, life expect-
ancy, sanitation etc.

(iv) Per capita income criteria also ignore non material things like
peace, pollution free environment, democracy, etc.

(v) Though Punjab has higher per capita income as compared to

Kerala but it has been ranked lower on Human Development In-
dex because it is far behind than Kerala in literacy rate and has
higher infant mortality rate than Kerala.

12. – Freedom

- Sense of security - Equal treatment

- Respect of others - Good working atmosphere

- Protection from infectious diseases.

295 X – Social Science

 13. Development of a country can generally be determined by the follow-
ing factors

(i) Per capita income (ii) Literacy rate

(iii) Health (iv) Life expectancy at birth

(v) Net Attendance Ratio

14. (i) A handsome salary is the first and foremost requirement for
almost all the job-seekers.

(ii) Peaceful and safe working atmosphc

(iii) Job security is another important factor.

(iv) medical and other facilities. In case of illnesses, there should be

a provision of paid leaves. Provident fund, gratuity is another
factor

(v) One also wants opportunity to learn during job period.

15. Think and do yourself

16. Kerala has a better Human Development Index ranking in compari-

son to Punjab even though Punjab has a higher per capita income in
comparison to Kerala because of the following reasons.

 Education: Kerala has a higher level of literacy rate than Punjab.

In fact, the literacy rate of Kerala is the highest in India.

 Health care: The health care facilities in Kerala are far better
than those in Punjab.

 Politics: The political parties in Kerala have taken steps for

genuine welfare of the people and have invested intelligently and
methodologically in the field of health and education.

X – Social Science 296

 17. See the main points of the chapter.

18. (i) Public facilities are the cheapest way to provide basic services
collectively.

(ii) Most of the poor people survive only because of public facilities.

(iii) There are many services like police, education, transportation,

etc., which become affordable only if they are part of public facili-
ties.

Source Based Questions

1. Read the following paragraph and answer the questions:

Besides seeking more income, one-way or the other, people also seek
things like equal treatment, freedom, security, and respect of others. They
resent discrimination. All these are important goals. In fact, in some cases,
these may be more important than more income or more consumption
Because material goods are not all that you need to live. Money, or material
things that one can buy with it, is one factor on which our life depends. But
the quality of our life also depends on non-material things mentioned above.
If it is not obvious to you, then just think of the role of your friendsin your life.
You may desire their friendship. Similarly, there are many things that are not
easily measured but they mean a lot to our lives. These are often ignored.
However, it will be wrong to conclude that what cannot be measured is not
important.

1. What other things do people want besides income?

2. What are the things in life that we can’t measure but they are impor-
tant?

3. ‘Money can’t buy all the things.’ Explain.

297 X – Social Science

Ans.1. equal treatment, freedom, security, and respect of others.

Ans.2. Friendship, relationship and quality of life

Ans.3. Money can’t buy fresh air, pollution free environment and happiness etc.

2. Read the following paragraph and answer the questions:

(For practice)

Suppose for the present that a particular country is quite developed.

We would certainly like this level of development to go up further or at least
be maintained for future generations. This is obviously desirable. However,
since the second half of the twentieth century, a number of scientists have
been warning that the present type, and levels, of development are not
sustainable.

Groundwater is an example of renewable resources. These resources

are replenished by nature as in the case of crops and plants. However,
even these resources may be overused. For example, in the case of
groundwater, if we use more than what is being replenished by rain then we
would be overusing this resource.

Non-renewable resources are those which will get exhausted after a

few years of use. We have a fixed stock on earth which cannot be
replenished. We do discover new resources that we did not know of earlier.
New sources in this way add to the stock. However, over time, even this will
get exhausted.

1. Why would non-renewable resources get exhausted after a few years

of use?

2. What do you understand by renewable resources?

3. Why is sustainable development important?

X – Social Science 298

 Chapter 2
Sectors of Indian Economy

Key Ponints to Remember:

 Primary Sector: Producing a good by exploiting natural resources

is an activity of primary sector, Such as: Agriculture, Dairy fishig
forestry and so on.

 Secondary Sector: Covers activites in which natural produts

are changed into other forms through ways of manufacturing that
we associate with industrial activities, Such as using cotton fiber
from plant, making iron and steel from iron ore etc.

 Tertiary Sector: These activities by themselves do not produce

a good but they are an aid or a support for the production pro-
cess. This sector is known as the Service sector also, Such as
transport services, insurance services, and so on.

 Private sector: Part of a country's economic system run by

individuals and companies, rather than the government.

 Public sector: usually comprised of organization that are owned

and operated by the government and exist to provide services for its
citizens.

 Organized sector is a sector where the employment terms are

fixed and regular, and the employees get assured work.

299 X – Social Science

  Unorganized Sector is a sector where the employment terms
are not fixed and regular, as well as the enterprises, are not
registered with the government.

 Gross Domestic product is a monetary measure of the market

value of all goods and services produced in a period i.e, Sum of
Primary sector + Secondary sector + Tertiary sector.

 When more people are working that is needed and even if some
people are removed from work, does not affect the total produc-
tion. This situation is called disguised unemployment. It is also
known as Hidden unemployment.

 Mahatama Gandhi National Rural Employment Gurantee Act

was enacted in 2005 which aims to provide employment 100 days
in a year. If it fails to do so, government will provide unemploy-
ment allowances to the people.

1. Primary or agriculture sector. Example, Agriculture, Dairy, Fish-

ing, Forestry, etc.

2. Secondary of industrial Sector: Example-Manufacturing and in-

dustrial activities, etc.

3. Tertiary or Service Sector: Example- Trade, Transport, Banking

Tourism, etc.

X – Social Science 300

 Share of Sectors in GDP

1971-72 2011-12

Primary Sector Approximately 40% 15%

Secondary Sector 25% 60%

Tertiary Sector 35% 100%

Total 100% 100%

Share of Sectors in Employment (%)

1972-73 2011-12

Primary Sector Approximately 74% 49%

Secondary Sector 11% 24%

Tertiary Sector 15% 27%

Total 100% 100%

Multiple Choice Questions

1. Sameer is an advocate. Identify in which sector of economy does he

work?

(a) Primary Sector (b) Secondary Sector

(c) Tertiary Sector (d) Industrial Sector

2. Which of the following is an activity of Primary Sector?

(a) Medical Treatment (b) Agriculture

(c) Manufacturing (d) Insurance

301 X – Social Science

 3. In which of the following scheme guarantee of at least 100 days of
work in rural area is ensured?

(a) Mid Day meal Scheme

(b) Annapoorna Yojna

(c) Antyodaya Anna yojna

(d) Mahatma Gandhi Nationalc Rural Employment Guarantee

scheme

4. Which of the following sector activities, by themselves, do not

produce a good but they are an aid or a support for the production
process?

(a) Secondary Sector (b) Tertiary Sector

(c) Primary sector (d) Industrial Sector

5. Identify the odd one activity from the following on the basis of Sector?

(a) Fisherman (b) Truck Driver

(c) Gardener (d) Potter

6. On the basis of given chart identify which is the largest sector in 2013-14?

X – Social Science 302

 (a) Primary Sector (b) Secondary sector

(c) Tertiary sector (d) None of the abovec

7. On the basis of given graph identify the sector which has the largest
share in Gross Domestic Product in the year 2013-14?

(a) Primary Sector (b) Tertiary Sector

(c) Secondary Sector (d) Equal share of all Sectors

8. Underemployment occurs when people–

(a) Do not want ot work

(b) Are working in lazy manner.

(c) Are working less than their capacity

(d) Are not paid for their work

9. Two statements, Assertion (A) and Reason (R) are given below. Read
the statements and choose the correct option given below.

Assertion (A): Secondary Sector is also known as Industrial sec tor

Reason (R): Secondary Sector by themselves, do not produce a

good but they arc an aid or a support for the production process.

303 X – Social Science

 (a) Assertion (A) and Reason (R) both are true and Reason is the
correct explanation of Assertion (A).

(b) Assertion (A) and Reason (R) both are true but Reason is not the
correct explanation of Assertion (A).

(c) Assertion is true but Reason is false.

(d) Reason is true but Assertion is false.

10. Two statements, Assertion (A) and Reason (R) are given below. Read
the statements and choose the correct option given below.

Assertion (A): Seasonal unemployment is seen only in the agricul-

ture sector.

Reason (R): Agriculture is dependent upon the season.

(a) Assertion (A) and Reason (R) both are true and Reason is the
correct explanation of Assertion (A).

(b) Assertion (A) and Reason (R) both are true but Reason is not the
correct explanation of Assertion (A).

(c) Assertion is true but Reason is false.

(d) Reason is true but Assertion is false.

11. Two statements, Assertion (A) and Reason (R) are given below. Read
the statements and choose the correct option given below.

Assertion (A): Secondary Sector is also known as Industrial sector.

Reason (R): Secondary Sector by themselves, do not produce a

good but they arc an aid or a support for the production process.

X – Social Science 304

 (a) Assertion (A) and Reason (R) both are true and Reason is the
correct explanation of Assertion (A).

(b) Assertion (A) and Reason (R) both are true but Reason is not the
correct explanation of Assertion (A).

(c) Assertion is true but Reason is false.

(d) Reason is true but Assertion is false.

12. Which of the following is not the condition of the labours engaged in
unorganised sector?

I. No job security

II. Inferior working conditions

III. High wages

IV. No fixed hours of working

(a) Only II (b) Only II, III and IV

(c) Only I, II and III (d) Only III

13. Which of the following conditions are related to Public Sector?

I. Job Security

II. Ownership of assets is in the hand of one person

III. Paid leaves

IV. Purpose is just to earn profits

(a) Only I, II and III (b) Only II, III and IV

(c) Only III (d) Only I and III

305 X – Social Science

 14. In the calculation of Gross Domestic Product-

(a) The value of goods and services produced by only Primary and
Secondary Sectors.

(b) The value of goods and services produced by only Secondary

and Tertiary Sector.

(c) The value of all the goods and services produced by Primary,
Secondary and Tertiary Sector within a country.

(d) The value of all final goods and services of produced within a
country by Primary, Secondary and Tertiary Sector.

15. Which of the following is also called as the ‘Right to work’?

(a) Antyodaya Anna Yojna

(b) Mahatma Gandhi National Rural Employment Guarantee

Acl- 2005

(c) Annapoorna vojna

(d) Work for Food Scheme

Multiple Choice Questions (Answer):

1. C. Tertiary Sector

2. B. Agriculture

3. D. Mahatma Gandhi National Rural Employment Guarantee Scheme

4. B. Tertiary Sector

5. B. Truck Driver

X – Social Science 306

 6. C. Tertian’ Sector

7. B. Tertian’ Sector

8. C. Are working less than their capacity.

9. A. Assertion (A) and Reason (R) both are true and Reason is the
correct explanation of Assertion (A).

10. D. Reason is true but Assertion is false.

11. C. Assertion is true but Reason is false.

12. D. Only III

13. D. Only land III

14. D. The value of all final goods and services of produced within a coun-
try by Priman’, Secondary and Tertiary Sector.

15. B. Mahatma Gandhi National Rural Employment Guarantee Act- 2005

Very Short/ Short/ Long Answer Type Questions:

1. Geeta works as a Researcher in an organization. While collecting

the data, she is not able to classify the work of the following people
according to sector. Help him to classify with reason.

(a) Shyamlal runs a dairy.

(b) Pramod is an engineer in a factory.

2. Pinku, along with five other members of his family, earns his living by
doing agriculture work in a village by producing about 20 quintals of
food grains ever)’ year from his farm. Due to some circumstances
Pinku had to come to the city with his younger brother. But the re-

307 X – Social Science

 maining members of his family still produce 20 quintals of food grains
every year.

Mention by which kind of unemployment Pinku and his brother were

suffering from? Also give proper reasoning in favor of your answer.

3. Why is the Tertiary Sector also called 'service sector?

4. What are the main objectives of the public sector?

5. Explain underemployment with examples.

6. How does the government support both farmers and consumers?

Explain with examples.

7. Ramesh is getting paid leave along with fixed working hours. Men-
tion in which field of employment is he working? Apart from these
facilities, what other facilities does he have in that area?

8. Write some important provisions of the Mahatma Gandhi National

Rural Employment Guarantee Act-2005.

9. How does the development of primary and secondary sector

promote tertiary sector? Explain in detail.

10. Compare the employment conditions of public and private sector.

11. Explain the difference between the employment conditions of orga-

nized and unorganized sectors.

12. Describe the different types of unemployment prevalent in India.

13. Mention the measures to remove different types of unemployment

prevalent in India.

14. Describe the various ways of generating employment opportunities

in rural areas.

X – Social Science 308

15. What is the utility of dividing economic activities into primary, sec-
ondary and tertiary activities? Explain.

16. What do you understand by seasonal unemployment? Explain giving

examples from urban and rural areas.

17. Explain how the public sector contributes to the economic develop-
ment of a nation?

Very Short/ Short Long Answer Type questions (Answers):

1. See the Important Points.

2. See the Important Points.

3. See the Important Points.

4. See the Important Points.

5. See the Important Points.

6. See the Important Points.

7. See the Important Points.

8. See the Important Points.

9. See the Important Points.

10. See the Important Points.

11. See the Important Points.

12. See the Important Points.

13. See the Important Points.

14. See the Important Points.

309 X – Social Science

 15. See the Important Points.

16. See the important Points.

17. See the Important Points.

Source Based Questions:

1. Read the passage and answer the following questions-

(1+1+2=4)

Another way of classifying economic activities into sectors could be on

the basis of who assets and is responsible for the delivery of services. In
the public sector, the government owns most of the assets and provides all
the services. In the private sector, ownership of assets delivery of services
is in the hands of private individuals or companies. Railways or post offr^
an example of the public sector whereas companies like Tata Iron and Steel
Company Limited (TISCO) or Reliance Industries Limited (RIL) are privately
owned. Activities in the private sector are guided by the motive to earn
profits. To get such services we have to pay money to these individuals and
companies. The purpose of the public sector is not just to earn profits.
Governments raise money through taxes and other ways to meet expenses
on the rendered by it.

(a) Tata Iron and Steel Company Limited (TISCO) belong to which
sector? (1)

(b) Railways is a Public Sector undertaking. How? (1)

(c) How do Public sector units different from private sector units? (2)

2. The estimated workforce engaged in Organised and Un-organised

sector in India is given in the following table. Read the table and
answer the questions that follows. (1+1+2=4)

X – Social Science 310

 Workforce in Different Sectors (In Millions)

Sector Organised Unorganised Total

Primary 1 232

Secondary 41 74 115

Tertiary 40 88 128

Total 82

Total In Percentage 100%

(a) What is the number of unorganised workers engaged in Primary

Sector? (1)

(b) In which sector does the maximum number of organised sector work-
ers is engaged? (1)

(c) In which sector does the number of workers engaged in organised

sector is 50% of the tota number of organised workers? (2)

Source Based Questions (Answer)

1. (a) Private Sector

(b) Ownership of assets and delivery of services is in the hands of

government.

(c) i. In the public sector, the government owns most of the assets
and provides all the services whereas. In the private sector,
ownership of assets and delivery of services is in the hands
of private individuals or companies.

311 X – Social Science

 ii. Activities in the private sector are guided by the motive to
earn profits. To get such services we have to pay money to
these individuals and companies. The purpose of the public
sector is not just to earn profits. Governments raise money
through taxes and other ways to meet expenses on the
services rendered by it.

2. Students should solve themselves.

X – Social Science 312

 Chapter 3
Money and Credit

Points to Remember:

 When goods are directly exchanged for goods and there is no

use of money, it is called Barter System.

 Money is someting that can act as a medium of exchange in

transaction. It eliminates the need for double conicidence of
wants.

 When both parties have to agree to sell and buy each other's
commodities. This is know as the double coincidence of wants.

313 X – Social Science

 Functions of reserve bank
• Issue the currency
• Monitor the work culture of banks and SHG
• Provide direction regarding terms and Interest
• Provide feedback regarding monetary policies of India
• Hold a part of the cash reserve of the banks
Credit as an asset:
• During the festival season, a shoe manufacture Salim has re-
ceived an order of making shoes in bulk, within one month's time.
To complete this production, he hires extra workers and has to
purchase the raw materials. He asks the supplier to supply leather
now and promise to pay him later. Then he takes some advance
paryment from trader. By the end, of the month, he is able to
deliver the order, make a good profit and repay the money he
had borrowed.
Credit as a debt trap:
• A farmer Swapna takes lona from a money lender to meet the
expenses of cultivation. But unfortunately the crop was hit by the
pests and there was crop failure. So, she is unable to repay the
loan and debt grows larger with Interest.
• Collateral is asset that the borrower owns (such as land, building
vehicle, livestock) and uses this as a gurantee to a lender until
the loan is repaid.

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• Self Help Groups: It's basic idea is to provide financial resources
for the poor thorugh organizing the rural poor especially women
into self Help Groups.

organizing the
rural poors, especially
women

Providing platfrom collection of

to discuss various savings from
social issues Works members.
of
SHG’s

Provide loan providing loans

at reasonable without
interest rate collateral

315 X – Social Science

Objective type questions (1 mark questions)

1. Identity the correct option that describes the type of source of credit?

(i) No collateral is required

(ii) Banks do not supervise.

(iii) Repeated borrowing can lead to debt trap.

(a) Informal sector credit

(b) Formal sector credit

(c) Long term debt

(d) Co-operative societies

2. Which of the following statement/statements is not appropriate for

Self Help Groups?

(i) These groups help the rural poor especially women.

(ii) The group charges interest on these loans.

(iii) A typical self-help group consists of 80 to 200 members.

(iv) Members can take small loans from the group only.

Option:

(a) Statements i and ii are correct.

(b) Satements i, ii, and iv are correct.

(c) All the statements are correct.

(d) Only statement iii is correct

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3. _________ loans are granted by traders, manufacturers, employers,
friends etc.

(a) formal (b) Informal

(c) Affordable (d) Short term

4. Banks offer higher rates of interest on which of the following accounts?

(a) saving account (b) Current account

(c) Long term fixed deposit (d) Joint account

5. In which of the following systems, goods are exchanged without the

use of money?

(a) Banking system (b) Collateral system

(c) Barter system (d) Formal system

6. Consider the statements given below and choose the correct answer

Statement 1: The Reserve Bank of India supervise the functioning of

formal sources of loans.

Statement 2: Private banks supervise the credit activities of lenders

in the informal sector.

(a) Statement (i) is correct and (ii) is incorrect.

(b) Statement (i) is wrong and (ii) is correct

(c) Both (i) and (ii) are wrong

(d) Both (i) and (ii) are correct

317 X – Social Science

 7. Evaluate the role of banks in the Indian economy by identifying the
appropriate statements from the following options.

(i) They keep the money of the people in their safe custody.

(ii) Helps in the development of infrastructure.

(iii) They give interest on the money deposited.

(iv) Authorize the currency of the country.

Option:

(a) Statements i and ii are correct.

(b) Statements i, ii and iii are correct.

(c) All the statements are correct

(d) Only statement IV is correct

8. Which of the following is an example of collateral?

(a) Livestock

(b) Land

(c) Deposits with banks

(d) All of the above

9. What comprises ‘terms of credit’?

(a) Interest rate

(b) Collateral and Documentation Requirement

(c) Mode of payment

(d) All of the above

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10. Which of the following instruct the bank to pay a specific amount form
the person's account to the person in whose name the cheque has
been issued?

(a) demand deposit (b) Cheque

(c) demand draft (d) Fixed deposit

Assertion/Reason (11-15)

There are two statements marked as Assertion (A) and Reason

(R). Mark your answer according to the codes given below:

(a) (A) and (R) both are true and (R) is the correct explanation of (A)

(b) (A) and (R) both are true but (R) is not the correct explanation (A)

(c) (A) is correct but (R) is wrong

(d) (A) is wrong but (R) is correct

11. Assertion: There is less sources of formal credit in rural areas.

Reason: Absence of collateral and documentation deters the rural

poor from getting loans.

12. Assertion: Banks and co-operative societies should increase their

lending facilities in rural areas.

Reason: Borrowers take loans and get interest.

13. Assertion:Poor households still depend on informal sources of credit.

Reason: Banks keep people’s money in safe custody for future use
by the depositors.

319 X – Social Science

 14. Assertion:Money transaction system is better than barter system.

Reason: The Problem of double coincidence can be eliminated by

monetary transactions.

15. Assertion:The Bank holds about 45% of their deposit as cash.

Reason: Major portion of the deposits are extended as loan.

Answer series (Question No. 1-15)

1. A. informal sector credit

2. D. only statement (iii) is correct.

3. B. informal

4. C. long term fixed deposit

5. C. barter system

6. A- Statement (i) is correct and (ii) is incorrect.

7. B. Statements (i), (ii) and (iii) are correct.

8. D All of the above

9. D. All of the above

10. B. Cheque

11. A. (A) and (R) both are true and (R) is the correct explanation of (A)

12. C (A) is correct but (R) is wrong

13. B. (A) and (R) both are true but (R) is not the correct explanation of (A)

14. A.(A) and (R) both are true and (R) is the correct explanation of (A)

X – Social Science 320

15. D. (A) is wrong but (R) is correct

Short / Long Questions (2,3 & 5 Marks Questions)

1. What is a barter system?

2. What are the two forms of modern currency?

3. What is meant by the double coincidence of wants?

4. Explain any three reasons for the banks and cooperative societies to
increase their lending facilities in rural areas.

5. Describe the importance of formal source of credit in economic de-

velopment.

6. ‘‘Cheap and affordable credit is crucial for the countries development”

Explain the statement.

7. Why is most of the people in India still dependent on informal sources

of credit for loan?

8. How does the Reserve Bank of India supervise the functioning of banks
and why is it necessary?

9. How is the concept of Self Help Group important for poor people?
Give your perspective. Discuss the working of Self Help Groups.
(SHG)

10. Mention the characteristics of formal and informal sources of credit in

India.

11. Describe the positive and negative role of credit with examples.
Whether credit will be useful or not depends on the situation. Give
two different examples in support of the statement.

321 X – Social Science

 12. Credit activities of the informal sector should be discouraged. Sup-
port the statement with relevant arguments.

Answer series short / long questions (2, 3 and 5 marks

questions)

1. Please see the key points

2. Please see the key points

3. Please sec the key points

4. Please sec the key points

5. Please sec the key points

6. Please sec the key points

7. Please see the key points

8. Please see the key points

9. Please see the key points

10. Please see the key points

11. Please see the key points

12. Please see the key points

Source based questions

1. Read the passage given below and answer the questions that
follow.

1. The Reserve Bank of India supervises the functioning of formal

sources of loans. For instance, we have seen that the banks maintain

X – Social Science 322

 a minimum cash balance out of the deposits they receive. The RBI
monitors the banks in actually maintaining cash balance. Similarly,
the RBI sees that the banks give loans not just to profit-making
businesses and traders but also to small cultivators, small scale
industries, to small borrowers etc.

(i) Name the organization which monitors the working of formal

sources of credit. (1)

(ii) What information banks have to give to RBI? (1)

(iii) Mention any two reasons why banks may not be willing to lend to
small cultivators, smal scale industries and small borrowers. (2)

2. Read the passage given below and answer the questions

asked.

2. Every loan agreement specifies an interest rate which the borrower

must pay to the lender along with the repayment of the principal. In
addition, lenders may demand collateral (security) against loans.
Collateral is an asset that the borrower owns (such as land, building,
vehicle, live stocks, deposits with banks) and uses this as a guaran-
tee to a lender until the loan is repaid. If the borrower fails to repay the
loan, the lender has the right to sell the asset or collateral to obtain
payment. Property such as land titles, deposits with banks, livestock
are some common examples of collateral used for borrowing.

(i) Explain the meaning of collateral. (1)

(ii) What are the rights of the lender in case the borrower fails to
repay the loan? (1)

(iii) Why do lenders ask for collateral while lending? (2)

323 X – Social Science

Answer (Source Based Questions)

Answer 1.

(i) Reserve Bank of India

(ii) How much they are lending, to whom, at what rate of interest, etc.

(iii) Proper documentation and collateral Some borrowers fail to meet

these reguirements. More likely they cannot repay the loan on time.

2. Students will solve by rending the passage on their own.

X – Social Science 324