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SAI International School
Session- 2025-2026

Home Assignment -6
Subject- Economics Ch- 3- MONEY AND CREDIT

Q Question Marks
no

1 Organised credit is also called 1
a) informal credit
b) formal credit
c) cooperative credit
d) none of these
2 Formal sources of credit do not include: 1
a) Banks
b) Co-operatives
c) Money lenders
d) LIC
3 Rich urban households _______________ per cent of their loans are from informal sources, while 1

________ per cent are from formal sources.

4 Mention the formal sources of credit? 1
a) Money lenders
b) Landlords
c) Traders
d) Banks and cooperatives
5 Which agency is not included in informal loan sector or agency: 1
a) Bank
b) Village money lender
c) Trader
d) Relative of borrower
6 Q- In the question given below, there are two statements marked as Assertion (A) and Reason (R). 1
Read the statements and chose the correct option:
Assertion (A): Higher cost of borrowing means a large part of te earnings of the borrowers is
used to repay the loan. Hence borrowers have less income left for themselves.
Reason (R): In certain cases, the high interest rate for borrowing can mean that the amount to be
repaid is greater than the income of the borrower.
Options:
a) Both A and R are true and R is the correct explanation of A.
b) Both A and R are true but R is not the correct explanation of A.
c) A is correct but R is wrong.
d) A is wrong but R is correct.
7 Assertion (A): There is no organization which supervise the credit activities of lenders in the 1
informal sector.
Reason (R): They can lend at whatever interest rate they choose. There is no one to stop them
from using unfair means to get their money back.
Options:
a) Both A and R are true and R is the correct explanation of A.
b) Both A and R are true but R is not the correct explanation of A.