Samacheer Kalvi 9th Social Science Guide Economics Chapter 3 Money and Credit

Tamilnadu State Board New Syllabus Samacheer Kalvi 9th Social Science Guide Pdf History Chapter 3 Money and Credit Text Book Back Questions and Answers, Important Questions Notes.

Tamilnadu Samacheer Kalvi 9th Social Science Solutions Economics Chapter 3 Money and Credit

Samacheer Kalvi 9th Social Science Money and Credit Text Book Back Questions and Answers

I. Choose the correct answer

  1. Certain metals like ______ (gold/iron) were used as a medium of exchange in ancient times.
  2. The Head Quarters of the RBI is at __________ (Chennai /Mumbai).
  3. International trade is carried on in terms of ________ (US Dollars / Pounds).
  4. The currency of Japan is ______ (Yen/Yuan)

Answer:

  1. Gold
  2. Mumbai
  3. US Dollars
  4. Yen

Samacheer Kalvi 9th Social Science Guide Economics Chapter 3 Money and Credit

II. Fill in the blanks

  1. ________ System can be considered as the first form of trade.
  2. money supply is divided into _______.
  3. The first printing press of the RBI was started at_________
  4. ________act as a regulator of the circulation of money
  5. the thesis about money by B.R. Ambedkar is _________

answer:

  1. barter
  2. four
  3. nasik
  4. reserve bank of india
  5. the probiem of the rupee – its origin and solutio

III. Match the following:

  1. US Dollar – (i) Automatic Teller Machine
  2. Currency in circulation – (ii) Substitute of money
  3. ATM – (iii) Universally accepted currency
  4. Salt – (iv) Saudi Arabia
  5. Riyal – (v) 85%

Answer:

  1. – (iii)
  2. – (v)
  3. – (i)
  4. – (ii)
  5. – (iv)

IV. Give Short Answer

Question 1.
Why was money invented?
Answer:

  1. At home planning the expenses is based on the monthly incomes, pending expenditure, savings, payment of interest etc.
  2. The budgets of a country or states are also framed on the basis of money.
  3. The government, as well as, private institutions and industries calculate their financial status through money.
  4. A common item with a standard value for the effective exchange of goods was needed. Therefore money was invented.

Samacheer Kalvi 9th Social Science Guide Economics Chapter 3 Money and Credit

Question 2.
What is ancient money?
Answer:

  1. The metals can be termed as first form of currency.
  2. Gold, Silver and Copper wefe the metals used first.
  3. They were called ancient currency.

Question 3.
What were the items used as barter during olden days?
Answer:
Leather, beads, shells, tobacco, salt, com, cattle and even slaves were exchanged as barter, says economists.

Question 4.
What is spice route? Why was it called so?
Answer:

  1. Spice route was an ancient trade route followed by merchants, importers and exporters.
  2. The merchants followed spice routes of both land and sea from Malabar in India as far west as Morocco.
  3. Pepper, Spices, Pearls, Gems, Rubies and Muslin clothes were exported from the eastern sea of Tamil Nadu.
  4. Pepper and spices took a major share of the exports.
  5. Thus this route was called the spice route.

Question 5.
What is natural money?
Answer:

  1. The metals such as silver and gold gained importance gradually all over the world.
  2. So, these metals were used as standard value in the exchange of goods.
  3. This was called as natural money.

Question 6.
Why were coins of low value printed in large quantities?
Answer:

  1. There were insufficient reserves of gold and silver.
  2. Mines also had a limited reserve of these metals.
  3. An alternative was found and coins were made using metals with lesser value.
  4. These were used to buy and sell goods of lesser value.
  5. It was used as the money of the poor people.

Samacheer Kalvi 9th Social Science Guide Economics Chapter 3 Money and Credit

Question 7.
What is meant by foreign exchange?
Answer:

  1. Currency is the medium of exchange in a country.
  2. The Indian currency is called the Indian Rupee.
  3. In a country the foreign currency is called foreign exchange.
  4. Purchasing capacity of all currencies in the world are compared using the US dollar as the standard currency.
  5. This value differs from country to country.
  6. Most of the international trade transactions are carried out in US dollar.

V. Answer in detail

Question 1.
Explain how money is transacted in the digital world.
Answer:

  1. One has to visit the bank and fill in a challan or produce a cheque to withdraw money from his account.
  2. Now this practice is gradually vanishing.
  3. Instead, one can easily withdraw the necessary amount from an Automated Teller Machine (ATM), with the help of an ATM debit card.
  4. One can easily withdraw the money needed at any time at ATMs located everywhere.
  5. A person can deposit money in their account without visiting the branch.
  6. Similarly, credit cards are also available, through which things are bought on credit and the amount can be paid later.
  7. Now a days, instead of using cheques or Demand Drafts (DDs), online transactions through net banking are carried out.
  8. Through this, money is transacted to anyone who lives anywhere across the globe.
  9. Technology has advanced sci much that even mobile banking is widely used nowadays.

Question 2.
Explain in detail about the role of RBI in the country.
Answer:

  1. A government has the responsibility to regulate money supply and oversee the monetary policy.
  2. Hoarding of money must be avoided at all costs in a country’s economy.
  3. Only then money can be saved in banks.
  4. All the major and important banks were nationalised (1969) in India.
  5. The Reserve Bank of India (RBI) regulates the circulation of currency in India.
  6. The Reserve Bank of India started its operations on 1st April 1935.
  7. It was permanently moved to Mumbai from the year 1937.
  8. RBI was nationalised in 1949. 85% of the printed currency is let for circulation.
  9. According to the statistics available as on August 2018, currency worth of 19 lakh crore are in circulation.

Samacheer Kalvi 9th Social Science Guide Economics Chapter 3 Money and Credit

Question 3.
Write in detail about the various functions of money.
Answer:

  1. When money replaced the barter system, a lot of practical issues were solved.
  2. Money acts a medium of exchange, a unit of measurement, a store in value and a standard of deferred payments.
  3. plays an important role in transactions.
  4. Medium of Exchange – Money should be accepted liberally in exchange of goods and services in a country.
  5. Unit of Account – Money should be the common, standard unit of calculating a country’s total consumer goods, products, services etc. For example, if a book costs 50, it means that the price of the book is equal to 50 units of money. Money is used to measure and record financial transactions in a country.
  6. A Store of Value – Money is used as a store of purchasing power. It can be used to finance future payments.

VI. Write the correct statement

Question (a)

  1. The barter system flourished wherever civilizations thrived.
  2. This was the initial form of trade.

(i) 1 is correct; 2 is wrong
(ii) Both 1 and 2 are correct
(iii) Both 1 and 2 are wrong
(iv) 1 is wrong; 2 is correct
Answer:
(ii) Both 1 and 2 are correct

Question (b)

  1. Most of the international trade transactions are carried out in US dollars.
  2. No other country except the US carries out trade in the world.

(i) Both the statements are correct.
(ii) Both the statements are wrong.
(iii) 1 is correct; 2 is wrong
(iv) 1 is wrong; 2 is correct
Answer:
(iii) 1 is correct; 2 is wrong

VII. Project and Activity

Question 1.
Visit a local museum and collect information about the coins displayed there.
Answer:
Activity to be done by the students themselves

Samacheer Kalvi 9th Social Science Guide Economics Chapter 3 Money and Credit

Question 2.
Imagine you are going abroad for a Post Graduation course in architecture. Write a letter to the Branch Manager regarding an education loan.
Answer:
Date: 12th June 20xx.
From
xxxx yyyy
Chennai – 600 xxx.
To
The Branch Manager,
State Bank of India, xxx Branch,
Chennai – 600 xxx
Sir,
Sub: Request to sanction Educational Loan

I submit the following for your kind perusal.

I have completed my B.Arch. degree in Anna University. I have applied for a Post graduation course in architecture, that is, M. Arch in Kingston University in Australia. I have got the admission card also. But the cost of studies is too high. I request you to kindly sanction an educational loan for Rs.8 lakhs.

I am an account holder of your bank here. My SB Account No. is xxxx xxxx xxxxx.

I will be much obliged if you kindly consider my application and sanction the Educational Loan. Expecting your favourable reply.

Thanking you.
Yours faithfully,
[Signature]

VIII. Life Skills

Question 1.
Observe at a 20 rupee note. What is written on it?
Answer:
The following lines are written on it in Hindi and English.
Reserve Bank of India.
Guaranteed by the Central Government.
I promise to pay the bearer the sum of twenty rupees.
(Singend)
Governor

Samacheer Kalvi 9th Social Science Guide Economics Chapter 3 Money and Credit

Question 2.
Prepare a family budget for a month.
Answer:
Activity to be done by the students themselves based on the monthly income.

Intext HOTS

Question 1.
How important is foreign exchange to one’s country?
Answer:
The foreign exchange market is merely a part of the money market in the financial centres. The buyers and sellers of claim on foreign money and the intermediaries together constitute a foreign exchange market. It is not restricted to any given country or a geographical area.

There is a wide variety of dealers in the foreign exchange market. Banks dealing in foreign exchange have branches with substantial balances in different countries. Through their branches and correspondents, the services of such banks, usually called “Exchange Banks,” are available all over the world.

Samacheer Kalvi 9th Social Science Money and Credit Additional Important Questions and Answers

I. Choose the correct answer

  1. Barter system involved exchange of ______ (Goods/Money)
  2. NFC was introduced in Britain in the year ______ (2016/2008)
  3. The Chinese made coins out of ______ (Bronze/Copper)
  4. In 1999 mobile banks were used in ______ (USA/Europe)
  5. In educational loans the ______
  6. One rupee and two rupee notes were first printed in India in the year ______ (1917/1927)
  7. Security Priting and Minting Corporation of India Ltd., was started in ________(Mumbai/Dewas)

Answer:

  1. Goods
  2. 2008
  3. Bronze
  4. Europe
  5. Student
  6. 1917
  7. Dewas

Samacheer Kalvi 9th Social Science Guide Economics Chapter 3 Money and Credit

II. Fill in the blanks

  1. Exchange of goods means _____
  2. Countries bordering the Indian ocean used ______
  3. Paper money spread to Europe through the travels of __________
  4. A gold plated coin called the was introduced in Europe __________
  5. The Credit card was invented by __________
  6. In 2016 NFC got introduced in __________
  7. All the major and important banks were nationalised in India in __________
  8. There is no security required for the loan amount upto ?
  9. The relationship between money and price is connected with the policy __________
  10. Trades and small entrepreneurs need for their needs __________
  11. When the metal supply got limited 2 currency was introduced __________
  12. The medium of exchange in a country is __________

Answer:

  1. Barter System
  2. Shells
  3. Marco Polo
  4. Florin
  5. John Biggins
  6. India
  7. 1969
  8. 4 lakhs
  9. Monetary
  10. Credit
  11. Paper
  12. currency

III. Match the following

Question 1.

  1. European union – (i) Pound
  2. England – (ii) Ringgit
  3. China – (iii) Dollar
  4. Malaysia – (iv) Euro
  5. Australia – (v) Yuan

Answer:

  1. – (iv)
  2. – (i)
  3. – (v)
  4. – (ii)
  5. – (iii)

IV. Give short answers

Question 1.
What is ATM?
Answer:

  1. ATM means Automated Teller Machine, with the help of an ATM debit card.
  2. One can easily withdraw the money needed at any time at ATMs located everywhere.

Question 2.
How is the major portion of the savings in banks used?
Answer:
A major portion of the savings in banks are used for the development of industries, economic growth and various development schemes for the welfare of the poor.

Samacheer Kalvi 9th Social Science Guide Economics Chapter 3 Money and Credit

Question 3.
What phenomenon increased the importance of the market and money?
Answer:

  1. Growing crops and production are done on a commercial basis, rather than on a subsistence level.
  2. This phenomenon also increased the importance of the market and money.

Question 4.
What type of currency notes were available till 1947?
Answer:

  1. Till 1947, the currency notes with the image of King George VI were in circulation.
  2. After Independence, the Government of India issued currency notes.

Question 5.
Why do we say that money, a store of value?
Answer:

  1. Money is used as a store of purchasing power.
  2. It can be used to finance future payments.

Question 6.
What is meany by SHG?
Answer:

  1. People who live in a particular place or those who are involved in a certain work join together as a group and start saving.
  2. These are called as Self Help Groups (SHG).

V. Answer in detail

Question 1.
What are educational loans?
Answer:

  1. Educational loan attempts to meet the educational aspirations of the society.
  2. A student is the main borrower.
  3. A parent, spouse or sibling can be the co-applicant.
  4. It is offered to students who want to pursue higher education in India or overseas.
  5. It can be taken for a full time, part-time or vocational course and Graduation or Post Graduation.
  6. There is no security required for the loan amount up to ? 4 lakhs
  7. The loan is repaid by the student generally after the employment.
  8. Students can apply through “Vidya Lakshmi Portal Education Loan Scheme”

Samacheer Kalvi 9th Social Science Guide Economics Chapter 3 Money and Credit

Question 2.
Explain the relationship between Money and Price.
Answer:

  1. The relationship between money and price is connected with the Monetary policy.
  2. There is a close relationship between the growth of money supply and inflation.
  3. Price controls play a very important role in a country’s economic stability.
  4. This role is played by RBI.
  5. Currency is the medium of exchange in a country.
  6. The Indian currency is called the Indian Rupee (INR).
  7. In a country the foreign currency is called foreign exchange.
  8. Purchasing capacity of all currencies in the world are compared using the US dollar as the standard currency.
  9. This value differs from country to country.
  10. Most of the international trade transactions are carried out in US dollar.

Question 3.
How is currency printed in India?
Answer:

  1. In 1925, the British government established a government press at Nasik in Maharashtra
  2. Currencies were printed three years later.
  3. In 1974, a press was started in Dewas, Madhya Pradesh.
  4. In the 1990’s two more presses were started in Mysuru, Karnataka and Salboni in West Bengal to print bank notes.
  5. The Reserve Bank of India has the authority to decide the value of currency to be printed and how the amount should reach its destination safely.
  6. Though the RBI has the power to print up to ten thousand rupee notes, at present a maximum of upto rupees two thousand is printed.

Question 4.
Write a note on credit.
Answer:

  1. Farmers avail credit during monsoons for buying seeds, agricultural input and other expenses.
  2. Traders and small entrepreneurs need credit for their needs.
  3. Even large industries receive credit to take up their new projects.
  4. Credit is available from:
    1. Formal financial institutions like nationalised and private banks and co-operative banks
    2. Informal financial institutions
    3. Micro credit is received through Self Help Groups (SHG).
  5. As far as nationalised banks and co-operative banks are concerned the interest to credit is comparatively lesser and there is guarantee for the pledged, goods.

Question 5.
What are informal financial institution?
Answer:

  1. Informal financial institutions are easily approachable to the customers with flexible procedures.
  2. But there are issues like the safety of items pledged high rates of interest and modes of recovery.
  3. The nationalised banks provide help to these groups through micro-credit.
  4. Credit given though SHG for street vendors, fishermen, especially women and the poor.
  5. In Tamil Nadu, all the banks have 10,612 branches, across the state.

Samacheer Kalvi 9th Social Science Guide Economics Chapter 3 Money and Credit

Question 6.
Why in foreign exchange important?
Answer:

  1. Without the ability to trade in different currencies, companies’ prospects would be limited.
  2. As a result the global economic.growth would suffer.
  3. Investors also use the forex market.
  4. Those who seek international diversification benefits need to trade currencies to buy and sell foreign assets and securities.
  5. Foreign exchange reserve increases the confidence in the monetary and exchange rate policies of the government.
  6. Foreign exchange reserves come to the rescue of any country to absorb the distress related to such crisis.
  7. In doing so the foreign exchange market is the mechanism that transfers purchasing power from one country to another.

VI. Write the correct statement

Question 1.
1. Mobile banking is not used.
2. Pepper and Spices took a major share of exports.
(i) Both 1 and 2 are correct
(ii) Both 1 and 2 are wrong
(iii) 1 is correct, 2 is wrong
(iv) 1 is wrong, 2 is correct
Answer:
(iv) 1 is wrong, 2 is correct

Samacheer Kalvi 9th Social Science Guide Economics Chapter 3 Money and Credit

Question 2.
1. Reserve Bank of India was permanently moved to Mumbai from 1935
2. Gold, silver and copper were called ancient money.
(i) Both 1 and 2 are correct
(ii) 1 is correct, 2 is wrong
(iii) 1 is wrong, 2 is correct
(iv) Both 1 and 2 are wrong
Answer:
(iii) 1 is wrong, 2 is correct

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