Advertisements
Chapters
1: Elementary Theory of Demand
2: Elasticity of Demand
3: Theory of Supply
Unit II - Factors of Production : Basic Concepts
4: Factors of Production
Unit III - Alternative Market Structures : Basic Concepts
5: Nature and Structure of Markets
Unit IV - The State and Economic Development
6: The State and Economic Development
Unit V - Money and Banking : Basic Concepts
7: Meaning and Functions of Money
▶ 8: Commercial Banks
9: Central Banks
10: Inflation
![Goyal Brothers Prakashan solutions for Economic Application [English] Class 10 ICSE chapter 8 - Commercial Banks - Shaalaa.com](/images/economic-application-english-class-10-icse_6:4ae302fabf354f56a3e776b0889e746c.jpg "Goyal Brothers Prakashan solutions for Economic Application [English] Class 10 ICSE chapter 8 - Commercial Banks")
Advertisements
Solutions for Chapter 8: Commercial Banks
Below listed, you can find solutions for Chapter 8 of CISCE Goyal Brothers Prakashan for Economic Application [English] Class 10 ICSE.
Goyal Brothers Prakashan solutions for Economic Application [English] Class 10 ICSE 8 Commercial Banks QUESTIONS [Pages 196 - 200]
Multiple Choice Questions
The advantage of having a bank account is that it ______.
it develops saving habits
it keep your money safe
it becomes easier to pay bills
All the above
A ______ is meant for day to day transactions.
Current account
Saving account
Fixed deposit account
Recurring deposit account
Identify which of the following Statement is true?
Primary deposits and initial deposits are the same thing.
Secondary deposits and derivative deposits mean the same thing.
Both Primary deposits and initial deposits are the same thing and Secondary deposits and derivative deposits mean the same thing.
Neither Primary deposits and initial deposits are the same thing nor Secondary deposits and derivative deposits mean the same thing.
Demand deposits include ______ and _______.
Term deposits, saving account deposits
Saving account deposits, current account deposits
Current account deposits, term deposits
None of these
Deposits made by the people from their own resources are called ______.
Primary deposits
Secondary deposits
Time deposits
None of these
Which is the primary function of Commercial Banks?
Accepting deposits
Advancing of loans
Both accepting deposits and advancing of loans
None of these
Which of the following is not the function of commercial bank?
Accepting deposits
Advancing of loans
Credit
Issue of currency
If legal reserve ratio is 20%, the value of money multiplier would be ______.
2
3
5
4
What is true about the commercial banks?
Commercial banks operate under the control of central bank.
Commercial banks deal with the public.
Commercial bank create credit.
All of these
The ratio of total deposits that a commercial bank has to keep with Reserve Bank of India is called ______.
Statutory liquidity ratio
Deposit ratio
Cash reserve ratio
Legal reserve ratio
Credit money is increased when CRR:
Falls
Rises
Both falls and rises
None of the above
Suppose in an economy, the initial deposit of ₹ 400 crores lead to the creation of total deposits worth ₹ 4000 crore. Then the value of reserve requirements would be ______.
0.01
1
0.1
0.21
People, by opening a bank account, can keep their surplus money safe in bank and can earn interest income too.
True
False
Match the following and select the correct option.
| Column A | Column B | ||
| (i) | A deposit created by a customer | A. | Term deposit |
| (ii) | A deposit created by bank when loan is granted | B. | Demand deposits |
| (iii) | Deposits payable by bank on demand | C. | Initial deposit |
| (iv) | Deposits the amount of which can be withdrawn only after a fixed period of time | D. | Secondary deposit |
(i) C, (ii) D, (iii) A, (iv) B
(i) B, (ii) A, (iii) D, (iv) C
(i) C, (ii) D, (iii) B, (iv) A
(i) D, (ii) C, (iii) A, (iv) B
A commercial bank accepts deposits from the people for the purposes of giving loans and making investments.
True
False
Observe the relationship of the first pair of word and complete the second pair.
The primary function of a commercial bank : Acceptance of deposit, the agency function of a commercial banks : ______.
Advancing of loans
Credit creation
Providing overdraft facility
Transfer of funds
Which of the following statements are true?
- A bank collects money from those who have surplus funds and lends this money to those who require it.
- Commercial banks do not transfer funds from one place to another.
- The principle objective of commercial banks is to earn profit.
Only (i)
Only (ii)
Only (i) and (iii)
All of these
Overdraft facility is usually availed by ______.
Savings deposit holders
Current account holders
Fixed deposit holders
Recurring deposit holders
Which of these are known as term/time deposits?
Fixed deposits and current accounts
Current account and savings account
Recurring deposits and fixed deposits
Recurring deposits and savings account
Which of these banks formulates the credit control tools?
Canara bank
Industrial Development Bank of India
State Bank of India
Reserve Bank of India
To ensure that the citizens of the country have faith in the currency, the currency is issued by:
Commercial banks
Central government
Central bank
Ministry of finance
The current account holders are not given interest on their deposits. The reason being:
Current account holders maintain their account only for a very short period.
They belong to the high-income group and do not need interest from the bank.
The businessmen who opened these accounts eam huge profit from their businesses.
There is no limitation on the number of withdrawals by the current account holders.
From which type of deposits, money can be withdrawn only after the maturity date?
Savings account
Current account
Recurring deposit account
Fixed deposit account
Assertion-Reasoning & Matching Based Questions
Identify the correct sequence of alternatives given in Column II by matching them with respective terms in Column I.
| Column I | Column II | ||
| A. | Function of Commercial bank | (i) | Initial deposits × `1/"LRR"` |
| B. | Money multiplier | (ii) | The difference between market value of the security and the amount of loan. |
| C. | Total money creation | (iii) | Acceptance of deposits |
| D. | Margin requirement | (iv) | `1/"LRR"` |
A. (i), B. (iii), C. (iv), D. (ii)
A. (iii), B. (iv), C. (i), D. (ii)
A. (ii), B. (i), C. (iv), D. (iii)
A. (iv), B. (ii), C. (i), D. (iii)
Match the following:
| Column I | Column II | ||
| A. | Primary deposits | (i) | Payable on demand |
| B. | Derivative deposits | (ii) | Deposits for a fixed period of time |
| C. | Demand deposits | (iii) | Cash deposits of people |
| D. | Term deposits | (iv) | Deposits created by banks (or loan deposits) |
A. (iii), B. (iv), C. (ii), D. (i)
A. (ii), B. (iv), C. (iii), D. (i)
A. (iv), B. (iii), C. (ii), D. (i)
A. (iii), B. (iv), C. (i), D. (ii)
Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Credit Creation comes to an end when total cash reserves become equal to the initial deposits.
Reason (R): The value of money multiplier is determined by Legal Reserve Ratio (LRR).
Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
Assertion (A) is true but Reason (R) is false.
Assertion (A) is false but Reason (R) is true.
Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Commercial Banks keep only a fraction of deposits as Cash Reserves and use the remaining deposits for given loans, etc.
Reason (R): All the depositors of Commercial Banks do not approach the banks for withdrawal of money at the [iame time and also they do not withdraw the entire amount in one go.
Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
Assertion (A) is true but Reason (R) is false.
Assertion (A) is false but Reason (R) is true.
Match the following:
| Column I | Column II | ||
| A. | Formula of Money Multiplier | (i) | Inverse |
| B. | Money multiplier = 4 | (ii) | Money multiplier = 10 |
| C. | Relationship between LRR and money multiplier | (iii) | LRR = 0.25 |
| D. | LRR = 0.1 | (iv) | `1/"LRR"` |
Short Answer Type Questions
What do you understand by commercial banks?
Mention two necessary conditions for a financial institution to become a commercial bank.
Mention primary functions of commercial banks.
Give two advantages of depositing money with commercial banks.
Differentiate between current deposit account and fixed deposit account.
Differentiate between Savings Deposit and Current Deposit.
What are saving bank accounts?
Compare the rate of interest given to such an account to that of a Current Account and a Fixed Deposit.
What is the difference between a loan and an overdraft?
How do commercial banks invest their surplus funds?
What is meant by credit creation?
What is meant by demand deposits?
How does the presence of banks help in capital formation?
State the advantage of a credit card over currency notes.
State two advantages of a bank account.
Which of the following is a function of a commercial bank? Give a reason to support your answer:
Acting as a lender of the last resort.
Deciding what is legal tender.
Determining monetary policy.
Provide cash credit facility.
Explain briefly the five agency functions of a commercial bank.
Explain how banks can advance loans through cash credit.
A depositor is allowed to withdraw more money than what is there in his account:
- What is the facility called?
- In which type of account is it permitted?
Long Answer Type Questions
Explain three important functions of a commercial bank.
What do you understand by commercial banks?
Explain clearly three methods adopted by Commercial Banks to borrow money from the public.
What do you understand by commercial banks?
Explain three ways by which commercial banks advance loans to the public.
Explain clearly three methods adopted by Commercial Banks to borrow money from the public.
Explain three ways by which commercial banks advance loans to the public.
Explain briefly the process of credit creation by commercial banks.
Explain briefly the five agency functions of a commercial bank.
Goyal Brothers Prakashan solutions for Economic Application [English] Class 10 ICSE 8 Commercial Banks QUESTION BANK [Pages 200 - 203]
What do you understand by commercial banks?
Mention two necessary conditions for a financial institution to become a commercial bank.
State two advantages of a bank account.
What is meant by demand deposits?
What are time (or fixed) deposits?
What are current deposits?
What is meant by primary deposits?
What are secondary (derivative) deposits?
Mention two differences between fixed deposits and demand deposits.
Explain three ways by which commercial banks advance loans to the public.
Give two differences between recurring deposits and fixed deposits.
Differentiate between Savings Deposit and Current Deposit.
What is meant by credit creation?
How do commercial banks invest their surplus funds?
What is money multiplier?
How money multiplier is related to Legal Reserve Ratio?
Give two advantages of depositing money with commercial banks.
What do you understand by commercial banks?
Explain clearly three methods adopted by Commercial Banks to borrow money from the public.
Explain three ways by which commercial banks advance loans to the public.
Explain briefly the five agency functions of a commercial bank.
Compare the rate of interest given to such an account to that of a Current Account and a Fixed Deposit.
Why are the banks required to keep only a fraction of deposits as cash reserves?
Explain briefly the process of credit creation by commercial banks.
Explain three important functions of a commercial bank.
Why are commercial banks called producers (creators) of money? Explain.
What is the difference between a loan and an overdraft?
How does the presence of banks help in capital formation?
Explain three main features of a current bank account.
What are saving bank accounts?
Explain the features of savings bank account.
Solutions for 8: Commercial Banks
Goyal Brothers Prakashan solutions for Economic Application [English] Class 10 ICSE chapter 8 - Commercial Banks
Shaalaa.com has the CISCE Mathematics Economic Application [English] Class 10 ICSE CISCE solutions in a manner that help students grasp basic concepts better and faster. The detailed, step-by-step solutions will help you understand the concepts better and clarify any confusion. Goyal Brothers Prakashan solutions for Mathematics Economic Application [English] Class 10 ICSE CISCE 8 (Commercial Banks) include all questions with answers and detailed explanations. This will clear students' doubts about questions and improve their application skills while preparing for board exams.
Further, we at Shaalaa.com provide such solutions so students can prepare for written exams. Goyal Brothers Prakashan textbook solutions can be a core help for self-study and provide excellent self-help guidance for students.
Concepts covered in Economic Application [English] Class 10 ICSE chapter 8 Commercial Banks are Meaning of Commercial Banks, Money Creation Or Credit Creation by the Commercial Banking System, Meaning of Central Bank, Functions of a Central Bank, Various Aspects of Credit Control Measures, Objectives of Credit Control, Method of Credit Control - Qualitative, Reserve Bank of India, Importance of Banks, Commercial Banks: Functions, Nationalisation of Banks, Differences Between a Central Bank and a Commercial Bank, Need for a Central Bank, Monetary Policy of the Central Bank, Method of Credit Control - Quantitative.
Using Goyal Brothers Prakashan Economic Application [English] Class 10 ICSE solutions Commercial Banks exercise by students is an easy way to prepare for the exams, as they involve solutions arranged chapter-wise and also page-wise. The questions involved in Goyal Brothers Prakashan Solutions are essential questions that can be asked in the final exam. Maximum CISCE Economic Application [English] Class 10 ICSE students prefer Goyal Brothers Prakashan Textbook Solutions to score more in exams.
Get the free view of Chapter 8, Commercial Banks Economic Application [English] Class 10 ICSE additional questions for Mathematics Economic Application [English] Class 10 ICSE CISCE, and you can use Shaalaa.com to keep it handy for your exam preparation.
