class -10th, economics, ch-3 ( Money and credit)

class - 10th , Economics, ch-3 ( Money and Credit)
Q1. What is barter system ?
Ans. When  goods are  directly exchanged   for goods without the use of money, it is called barter system.

Q2. What do you mean by double coincidence of wants ?

Ans. When both parties have to agree to sell and buy each others commodities. Then it is known as double coincidence of wants.

Q3. what is the use of making transaction in money ?
Ans. A person holding money can easily exchange it for any commodity or service that he or she might want. Money eliminates the need for double coincidence of wants.

Q4. Why is money called the medium of exchange ?
Ans. Money by providing the crucial intermediate step eliminates the need for double coincidence of wants. Since money acts as an intermediate in the exchange process, it is called a medium of exchange.

Q5. Mention the various form of money used since the ancient times ? How is the modern form of money different from various forms of money used in the past ?

Ans. Before the introduction of coins, a variety of objects was used as money. For example, since the very early ages, Indians used  grains and cattle as money. Thereafter came the use of metallic coins — gold, silver, copper coins — a phase which continued well into the last century. Modern forms of money include currency is not made of precious metal such as gold, silver and copper . Unlike grain and cattle. 

Q6. State the Indian law with respect to money ?

Ans.According to law  the Reserve Bank of India issues currency notes on behalf of the

central government. As per Indian law, no other individual organisation is allowed to issue

currency. Moreover, the law legalises the use of rupee as a medium of payment that cannot be refused in settling transactions in India. No individual in India can legally refuse a payment made in rupees. Hence, the rupee is widely accepted as a medium of exchange.

Q7. What do most of the people do with the surplus money  ?

        or

What is the advantage of depositing money in the bank ?

Ans. People deposit their surplus money in the bank by opening a bank account. 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.