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Money And Credit

Question
CBSEENSS10016074
Wired Faculty App

Describe why deposits are called demand deposits.

Solution

Banks accept the deposits and also pay an amount as interest on the deposits. In this way people’s money is safe with the banks and it earns an amount as interest. People also have the provision to withdraw the money as and when they require.
Since the deposits in the bank accounts can be withdrawn on demand, these deposits are called demand deposits.

Some More Questions From Money and Credit Chapter

In what ways does the Reserve Bank of India supervise the functioning of banks? Why is this necessary?

Analyse the role of credit for development.

Manav needs a loan to set up a small business. On what basis will Manav decide whether to borrow from the bank or the moneylender? Discuss.

In India, about 80 per cent of farmers are small farmers, who need credit for cultivation.

(a) Why might banks be unwilling to lend to small farmers?

(b) What are the other sources from which the small farmers can borrow?

(c) Explain with an example how the terms of credit can be unfavourable for the small farmer.

(d) Suggest some ways by which small farmers can get cheap credit.

Majority of the credit needs of the _________ households are met from informal sources.

_________ costs of borrowing increase the debt-burden.

_________ issues currency notes on behalf of the Central Government.

Banks charge a higher interest rate on loans than what they offer on ________.

_________ is an asset that the borrower owns and uses as a guarantee until the loan is repaid to the lender.

In a SHG most of the decisions regarding savings and loan activities are taken by:

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