The third chapter in Economics textbook is 'Money and Credit'. This chapter discusses about modern forms of money and how they are linked with the banking system. In the second half of the chapter, facts about credit have been revealed and how it impacts borrowers, depending upon the situation.
Money acts as an intermediate in the exchange process & it is called medium of exchange. In many of our day to day transactions, goods are being bought & sold with the use of money.
Money acts as an intermediate in the exchange process & it is called medium of exchange. In many of our day to day transactions, goods are being bought & sold with the use of money.
Double coincidence of wants
When in the exchange, both parties agree to sell and buy each others commodities it is called double coincidence of wants. In the barter system, double coincidence of wants is an essential feature.
The topics discussed in this chapter are as follows:
- Money as a Medium of Exchange
- Modern form of Money
- Loan Activities of Banks
- Terms of Credit
- Formal Sector Credit in India
- Self Help Groups for the Poor
Students can view and download the chapter from the link given below.
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NCERT Solutions for Chapter 3: Money and Credit
Also Check
Chapter 1: Development
Chapter 2: Sectors of Indian Economy
Chapter 4: Globalisation and the Indian Economy
Chapter 5: Consumer Rights
Check out Frequently Asked Questions (FAQs) for Chapter 3: Money and Credit
What do banks do with the deposits they accept from customers?
Banks use a major portion of deposits to extend loans to people.
What comprises ‘terms of credit’?
Interest rate, collateral and documentation requirement and mode of repayment together comprise terms of credit.
Why do banks ask for collateral while giving credit to a borrower?
Collateral is an asset that the borrower owns (land, building, vehicle, livestock, land documents, deposits with banks, etc.) which stands as a security against the money borrowed. In case the borrower fails to repay the loan, the lender has the right to sell the asset or collateral.
What is the main informal source of credit for rural households in India?
Money lenders are the main source of informal credit for rural households.
What is a cheque?
A cheque is a paper instructing the bank to pay a specific amount from the person’s account to the person in whose name the cheque has been made.