This MCQ module is based on: Exercises: Banks & Finance
TOPIC 24 OF 24
Exercises: Banks & Finance
🎓 Class 7
Social Science
CBSE
Theory
Ch 8 — Banks: Deposits, Loans and Payment Systems
⏱ ~15 min
🌐 Language: [gtranslate]
🧠 AI-Powered MCQ Assessment
▲
Myaischool Lt Sst Assessment
▲
[myaischool_lt_sst_assessment grade_level="class_7" subject="economics" difficulty="basic"]
Chapter 8 -- Questions and Activities
📝
NCERT Exercises -- Banks and the Magic of Finance
Q1. What is financial infrastructure? How does it complement physical infrastructure?
L2 UnderstandModel Answer: Financial infrastructure comprises banks, payment systems, and stock markets that manage money flow. It complements physical infrastructure by providing funding for roads, railways, and communication networks. Without financial systems, there would be no way to raise capital for building or maintaining physical infrastructure.
Q2. How does having a bank account help people? Should everyone have one?
L4 AnalyseModel Answer: Bank accounts keep money safe, earn interest through compounding, enable digital transactions, provide access to loans, and allow direct benefit transfers from government schemes. Universal bank access ensures financial inclusion, reduces cash dependence, and empowers individuals economically.
Q3. What are the advantages and disadvantages of compound interest for savers and borrowers?
L4 AnalyseModel Answer: For savers: compounding grows savings exponentially over time -- the longer you save, the more you earn. For borrowers: compound interest means loan repayments grow if not paid on time, making debt more expensive. So compounding rewards patient savers but penalises delayed repayments.
Q4. How does financial infrastructure enable money flow between households and businesses?
L3 ApplyModel Answer: Households deposit savings in banks, which lend to businesses as loans. Businesses use loans to produce goods, pay wages to workers (households), and sell products. Payment systems like UPI enable quick transactions. The government facilitates this flow through policies, regulations, and schemes like Jan Dhan Yojana.
Q5. Why do fixed deposits earn higher interest than savings accounts?
L3 ApplyModel Answer: Fixed deposits lock money for a longer period, giving banks a stable and predictable fund to lend. Since savers cannot withdraw during the term, banks reward them with higher interest rates compared to savings accounts which allow frequent withdrawals.
Q6. Sahil received Rs.10,000 as a prize. His father promises 12% interest per year. After 3 years, how much would Sahil have?
L3 ApplyAnswer: Year 1: 10,000 + 12% = Rs.11,200. Year 2: 11,200 + 12% = Rs.12,544. Year 3: 12,544 + 12% = Rs.14,049.28. After 3 years, Sahil would have approximately Rs.14,049.
Q7. How does the stock market mobilise individual savings? How do companies benefit?
L4 AnalyseModel Answer: The stock market allows individuals to invest savings by buying shares, earning returns through price appreciation and dividends. Companies benefit by raising funds without taking loans, which they use for expansion and operations. This system efficiently channels household savings into productive business activities.
Q8. How can we balance convenience of digital payments with cyber fraud risk?
L6 CreateGuidance: Use strong passwords, enable two-factor authentication, never share OTPs, verify payment recipients, use only official banking apps, keep devices updated, avoid public Wi-Fi for transactions, and report suspicious activity to 1930.
Financial Infrastructure Overview
L2 UnderstandFigure: Key components of India's financial infrastructure
📋
CBQ -- Chapter Review
Case Study: Meera, a small business owner, uses UPI for all transactions. She recently deposited Rs.50,000 in a fixed deposit at 7% for 2 years to save for expanding her shop.
Q1. How much will Meera's FD be worth after 2 years?
L3 ApplyAnswer: (B) -- Year 1: 50,000 + 7% = 53,500. Year 2: 53,500 + 7% = 57,245.
Q2. What advantage does UPI give Meera's business over cash-only transactions?
L4 AnalyseModel Answer: UPI provides instant payment, digital records for accounting, no risk of counterfeit notes, wider customer base (those without cash), and reduced theft risk. It also helps her track all transactions digitally for tax purposes.
HOT Q. Create a simple financial plan for a student who earns Rs.500 monthly pocket money.
L6 CreateHint: Split into savings (bank account), needs (school supplies), and wants (treats). Track spending in a simple diary. Set a savings goal.
🎯 Practice Questions -- Review
True or False
The Jan Dhan Yojana opened over 50 crore bank accounts.
TRUEBanks lend money at lower rates than they pay on deposits.
FALSENABARD supports rural development.
TRUECorrection: Banks charge higher interest on loans than they pay on deposits. This difference is their income.
Match the Following
1. Compounding
→
(a) Government bank scheme
2. Jan Dhan Yojana
→
(b) Interest on interest
3. NPCI
→
(c) Central bank
4. RBI
→
(d) Launched UPI
Answers: 1→(b), 2→(a), 3→(d), 4→(c)
Think & Create
Create a Financial Safety poster with dos and don'ts of digital banking safety, including emergency helpline numbers.
Guidance
Include: never share OTPs/PINs, use official apps only, enable 2FA, avoid public Wi-Fi for banking, report fraud to 1930 or cybercrime.gov.in.Frequently Asked Questions
What are the important questions in Class 7 Economics Part 3 -- Exercises: Banks & Finance?
The exercise section of Class 7 Economics covers competency-based questions aligned with CBSE CBQ format. These include multiple-choice questions testing analysis and application skills, assertion-reason questions requiring logical reasoning, and short and long answer questions that develop critical thinking. Students should practise all question types to prepare for board examinations.
How should I prepare for Class 7 Economics exercises?
To prepare effectively, first read the complete NCERT chapter thoroughly. Then attempt the exercises without referring to the textbook. Check your answers against the NCERT solutions. Focus on understanding concepts rather than memorising answers. Practise CBQ-format questions as they test higher-order thinking skills like analysis, evaluation, and application.
Are NCERT exercises enough for Class 7 Economics board exam preparation?
NCERT exercises form the foundation of board exam preparation for Class 7 Economics. CBSE recommends NCERT as the primary textbook, and most board questions are based on NCERT content. However, students should also practise competency-based questions and assertion-reason questions in the latest CBSE format to score well.
What is the CBQ format in Class 7 Economics?
CBQ stands for Competency-Based Questions, introduced by CBSE to test higher-order thinking skills. These questions present a passage, data, or case study followed by questions that require students to analyse, evaluate, or apply their knowledge rather than simply recall facts. CBQ questions are an important part of the current CBSE examination pattern.
How many marks are exercises worth in Class 7 Economics?
In the CBSE board examination for Class 7, Economics carries a significant weightage. The exercises help students practise the types of questions that appear in the exam, including objective questions, short answer questions, and long answer questions. Regular practice of NCERT exercises ensures thorough preparation for all question formats.
What types of questions are included in NCERT Class 7 Economics exercises?
NCERT Class 7 Economics exercises include a variety of question types such as fill in the blanks, true or false, match the following, short answer questions, long answer questions, map-based questions, and activity-based questions. The MyAISchool interactive version adds CBQ-format questions and assertion-reason pairs for comprehensive exam preparation.
AI Tutor
Social Science Class 7 — Exploring Society Part II
Ready