Karnataka Board Class 9 Social Science Economics Chapter 30 Money and Credit Solution Exercise Question and Answer
Karnataka Board Class 9 Social Science
I.) Fill in the blanks with suitable words.
1) Indian rupee is derived from ___________ .
2) Cheque is an instrument from ___________ .
3) The banks which deal with foreign currency are called ___________ .
4) The Reserve Bank of India was established in the year ___________ .
5) The money of Japan is ___________ .
6) Government of India nationalized 14 commercial Banks in ___________
Answer:-
1.) Sanskrit
2.)
3.) Exchange Banks
4.) 1stApril 1935
5.) Yen
6.) 1969
II.) Answer the following questions.
1) What is Barter exchange system ?
Answer:- Barter exchange system means exchange of goods for goods without the use of money. Example For example if Ramesh had cow and wanted Sheep in exchange. Ramesh had to search an individual who not only had a sheep, but also who needed cow in exchange.
2) State the means of money
Answer :-
3) Which is the central bank of India ?
Answer :-Reserve bank of India is the central bank of India
4) Explain the functions of money
Answer :-
Functions of money are classified into
1) Primary functions
a) Medium of exchange or means of payment – Money is used to buy the goods and services.
b) Measure of Value- All the values are expressed in terms of money it is easier to determine the rate of exchange between various type of goods and services.
2) Secondary functions –
a)Standard of deffered payments- A borrower borrowing today places himself under an obligation to pay a specified sum of money on some specified future date
b) Store of value or store of purchasing power- The introduction of money has helped to save it for future as it is not perishable.
c) Transfer of value or transfer of purchasing power- The introduction of money has made the exchange of goods to distant places as well as abroad possible.
3) Contingent functions – money also performs certain contingent functions. They are
a) Basis of Credit- Money forms the basis of credit. The cheque system has further allowed the credit creation by banks.
b) Increase productivity of capital- The Liquidity feature of money has helped the capital to be transferred from the less productive to more productive uses.
5) Mention the different types of banks
Answer :-
The different types of banks are:
- Industrial Banks
- Exchange Banks
- Savings Banks
- Co-Operative Banks
- Land Mortgage Banks
6) Explain the functions of RBI
Answer :-
Functions of central bank or RBI
- Monopoly of Note issue – RBI has the monopoly of issuing currency notes of Rs 2 and above namely Rs 5, Rs 10, Rs 100, Rs 500, and Rs 1000. One Rupee is issued and circulated by RBI on behalf of the Government, though the right of issue of one rupee notes or coins is with the Central Government.
- Acts as Banker to Government- The RBI accepts the deposits of Central and State Governments. It collects the money on behalf of the Government like taxes and other charges. On specific instruction, it also makes the payments on behalf of the Government. It issues Government bonds, Treasury bill and also acts as financial adviser to the Government.
- Bankers bank- It acts as bankers bank. It controls all the banks of the country. All the banks of the country have to keep one part as reserve out of their deposits in the RBI.
- Acts as National Clearing House- RBI acts as the clearing house for settlement of banking transactions economically.
- Acts as the controller of Credit- The RBI controls or expands the credit creation of commercial banks, according to desired monetary situation in the economy.
- Custodian of Foreign Exchange Reserves- The RBI acts as the custodian of foreign exchange reserves
- Publishes the Economic Statistics and Other Information- The RBI collects statistics on economics and financial matters and publishes it periodically
- Promotion of Banking Habits- The RBI institutionalizes saving through the promotion of banking habit and expansion of the banking system in unbanked areas.
- Facilities for Agriculture- Through NABARD it provides short-term and long-term financial facilities to agriculture and allied activities.
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