A presentation useful to the students of 10th grade in the CBSE stream.

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3.  In how many sectors economic activities can
be divided?
 Which sectors produce goods?
 Which sector provide services?
 Name the economic term for the medium
which was generally accepted for buying of
goods & services?
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4.  LET US DISCUSS AND LEARN :
Barter system,
Origin of money,
Fuctions of money,
Modern forms of
money,
Functions of bank,
Different sources credit .
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6.  What were the needs of primitive man?
 How did primitive man satisfy his needs?
 With the passage of time,why it become
impossible for a man to satisfy his wants by
producing all the desired things?
 How man solved his problem?
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7. Barter system refers to
that system by which
one commodity is
exchanged for another
without use of money.
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8. What type of
problem arised in
barter system?
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9. See this example-
I have a horse .I want to
exchange horse with
shoes and wheat.
What type of problem arised
in this situation ?
Will he cut his horse in
pieces?
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10. I produce cloth .I want to
exchange cloth with milk and
rice.
How much quantity of cloth
will be exchanged for milk
and rice ?
What type of problem
arised in this situation ?
See this example-
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11. See this example-
I grow vegetables .By
exchanging vegetables I get
other things.
Can I store vegetables for
my future needs ?
What type of
problem arised
in this
situation?
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12.  Problem of double coincidence.
 Problem of divisibility.
 Lack of measure of value.
 Problem of store of value.
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13.  How man solved the problem of double
coincidence of wants?
 How man solved the other problems of Barter
System?
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15.  Money is anything which is
generally accepted by the
people as a common medium
of exchange.
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16.  Medium of exchange.
 Measure of value.
 Store of value.
 Standard of deferred payments.
 Transfer of value.
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17.  What was the mode of exchange prior to
the introduction of coins?
 What metals were used to make coins till
last century?
 What are the modern forms of money ?
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18.  Commodity money.
Grains Animals
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21. The modern currency is without any use
of its own as a commodity.
Why is it accepted as money ?
Why we accept paper money?
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22. Why in modern times paper money is also becoming inconvenient ?
Problem carrying
large amounts
Problem of counting
big paymment Problem of safety
What are the convenient forms of money nowadays?
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23. Cheque
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24.  A cheque is used for
payments.The payer who has an
account with the bank,directs the
bank to make payment for a
specific amount, to a person in
whose name the cheque has
been made or the bearer of the
cheque.
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25. Features of cheque
1. Name of person
to whom
payment has to
be made .
2. Date
3. Amount in words
4. Amount in figurs
5. Signature of the
a/c holder
6. Bank a/c number
7. Name of bank
and branch
8. Cheque no.
9. A/C payee
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26.  What do people do with their extra money?
 Why people deposit money in the banks ?
 When the deposits can be withdrawn by
depositer from the bank ?
 What do the banks do with the doposits
which they accept from the public?
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27.  It accepts deposits.
 It gives loans.
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28. How do banks earn ?
Bank charge a higher interest rate on
loans than what they offer on
deposits.
The difference between what is
charged from borrowers and what is
paid to depositors is their main
source of income.
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29. Loan refers to an
agreement in which the
lender supplies the
borrower with money,
goods, or services in return
for the promise of future
payment ?
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30. Why people demand for loan?
-To purchase inputs of agriculture.
-To repay their previous loans.
-To satisfy their unproductive needs.
-To purchase plants ,machinary,
equipments.
-To setting up various business units.
-To buy various luxuxies like –car,
computer, AC, flat ,house etc.
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33.  Why did Salim need credit ?
 What was the risk ?
 What was the outcome?
 Why did Swapna need credit ?
 What was the risk in her case ?
 What was the outcome ?
 What term can be used to explain Swapna’s
situation ?
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34. Debt trap refers to that
situation in which borrower
finds it very difficult to
repay the loan.
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35. Colleteral
Colleteral is an asset that the borrower
owns (such as land ,building, vehicles
,livestock etc ) and uses this as a
guarantee to a lender until the loan is
repaid. If borrower fails to repay the loan ,
the lender has right to sell the colleteral
to obtain payments.
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37. When a person borrows funds
certain terms are settled.
These include interest rate,
collateral ,documentation,
mode of payment, duration of
loan etc. All these together are
known as Terms of Credit.
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38.  What are the various
sources of credit for
rural families ?
 Among these sources
of credit which sources
of credit work under
the supervision of RBI?
 Which sources of credit
do not work under the
control of RBI?
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39.  Banks and Co operatives
 Function under control of
RBI
 Cheap interest rate
 Collateral required
 More documentation
 Loans for productive
purposes
 Systematic in their
functioning
 Moneylenders ,
Traders , Landlords
,Friends, Employers
,Relatives
 Not function under control
of RBI
 High interest rate
 Credit even without
collateral
 Less documentation
 Loans even for non-
productive purposes
 Not systematic in
functioning
Formal sources Informal sources
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40. Why the share of formal sector credit is higher for the richer
households,compared to poor households?
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41.  Cheap and affordable credit is crucial for
the country’s development.
 It is necessary that banks and cooperatives
increase their lending particularly in the
rural areas, so that the dependence on
informal sources of credit reduces.
 Secondly, while formal sector loans need to
expand, it is also necessary that everyone
receives these loans.
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42.  Numbers of members are large in a cooperative.
 It accepts deposits from its members.
 With these deposits as collateral, the Cooperative
has obtained a large loan from the bank.
 These funds are used to provide loans to
members.
 Once these loans are repaid, another round of
lending can take place.
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44. -A typical SHG has 15-20 members, usually belonging to one
neighbourhood, who meet and save regularly.
-Saving per member varies from Rs 25 to Rs 100 or more, depending on the
ability of the people to save.
-Members can take small loans from the group itself to meet their needs.
-The group charges interest on these loans but very less .
- After a year or two, if the group is regular in savings, it becomes eligible
for availing loan from the bank.
Loan is sanctioned in the name of the group and is meant to create self
employment opportunities for the members.
-Any case of non repayment of loan by any one member is followed up
seriously by other members in the group.
-Because of this feature, banks are willing to lend to the poor women when
organised in SHGs, even though they have no collateral as such.
-Thus, the SHGs help borrowers overcome the problem of lack of
collateral.
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45. Fill in the blanks:
(i) Majority of the credit needs of the
______________households are met from informal sources.
(ii) ___________________costs of borrowing increase the
debt-burden.
(iii) __________________ issues currency notes on behalf of
the Central Government.
(iv) Banks charge a higher interest rate on loans than what
they offer on __________.
(v) _______________ is an asset that the borrower owns and
uses as a guarantee until the loan is repaid to the lender.
Exercise
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46. 2. Choose the most appropriate answer.
(i) In a SHG most of the decisions regarding savings and loan
activities are taken by
(a) Bank.
(b) Members.
(c) Non-government organisation.
(ii) Formal sources of credit does not include
(a) Banks.
(b) Cooperatives.
(c) Employers.
Exercise
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