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SAI International School
Session- 2025-2026

Home Assignment -4
Subject- Economics Ch- 3- MONEY AND CREDIT

Q Question Marks
no

1 A person is said to be in a debt trap when ____. 1
a) They take credit from the informal sector
b) They cannot get credit from the formal sector
c) The loan amount is less than their requirement
d) The loan repayment amount exceeds their income

2 A person is said to be in a debt trap when ____. 1
a) They take credit from the informal sector
b) They cannot get credit from the formal sector
c) The loan amount is less than their requirement
d) The loan repayment amount exceeds their income

3 What is the difference between money and credit? 1
a) Money is a loan, while credit is a form of payment.
b) Money is a physical entity, while credit is a virtual entity.
c) Money is a medium of exchange, while credit is a promise to pay.
d) Money is a store of value, while credit is not

4 Whether ____________________ would be useful or not, therefore, depends on the risks in the 1
situation and whether there is some support, in case of loss.
5 Assertion (A): Taking loan would be useful or not depends on the risk involved in a situation. 1
Reason (R): The chance of benefitting from credit is highest in agricultural sector.
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 true but R is false.
d) A is false but R is true.

6 In the question given below, there are two statements marked as Assertion (A) and 1
Reason (R): Read the statements and chose the correct option:
Assertion (A): In rural areas, the main demand for credit is for crop production.
Reason (R): Farmers usually take crop loans at the beginning of the season and repay the
loan after harvest.
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.