VEDA'S CLASSES
Worksheet – ICSE Class 10 Economics
Topic: Commercial Bank and Central Bank
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SECTION A: MULTIPLE CHOICE QUESTIONS (20 Marks)
(Choose the correct answer from the options given below.)
1. A commercial bank is primarily involved in:
a) Printing currency
b) Issuing coins
c) Accepting deposits and lending money
d) Managing fiscal policy
2. Which of the following is not a function of the Central Bank?
a) Issuing currency
b) Accepting deposits from the public
c) Acting as a banker to the government
d) Regulating credit
3. Which of the following is an example of a commercial bank in India?
a) Reserve Bank of India
b) State Bank of India
c) Ministry of Finance
d) National Development Council
4. CRR stands for:
a) Cash Retained Ratio
b) Cash Reserve Ratio
c) Credit Reserve Ratio
d) Capital Reserve Rate
5. Who is known as the lender of last resort?
a) Finance Ministry
b) Commercial Bank
c) Central Bank
d) Private Money Lender
6. The central bank controls credit through:
a) Money lending
b) Non-banking institutions
c) Quantitative and qualitative measures
d) Banking Ombudsman
7. Commercial banks provide loans to:
a) Only government
b) Only corporate bodies
c) General public and businesses
d) Only exporters
8. Bank Rate is a tool used by:
a) Commercial banks
b) State government
c) Central Bank
d) World Bank
9. Which function is performed only by the central bank?
a) Accepting public deposits
b) Providing overdrafts
c) Issuing currency notes
d) Collecting cheques
10. The Reserve Bank of India was established in:
a) 1935
b) 1947
c) 1950
d) 1
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SECTION B: SHORT ANSWER QUESTIONS (50 Questions – 1 mark each)
1. What is a commercial bank?
2. Name two primary functions of a commercial bank.
3. Mention any two secondary functions of commercial banks.
4. Define the term ‘credit creation’.
5. What is the role of commercial banks in capital formation?
6. State any one function of a central bank.
7. What do you understand by the term ‘banker’s bank’?
8. What is CRR?
9. What is SLR?
10. How does a central bank act as a custodian of foreign exchange?
11. Define monetary policy.
12. What is a repo rate?
13. Explain the term ‘lender of last resort’.
14. Mention two qualitative measures of credit control.
15. State any two quantitative measures of credit control.
16. Define open market operations.
17. What is a statutory liquidity ratio?
18. Mention any two functions of the Reserve Bank of India.
19. What is the importance of a central bank in a country?
20. Distinguish between commercial bank and central bank.
21. What is a savings account?
22. What is a current account?
23. What is a fixed deposit?
24. What is an overdraft facility?
25. Name any two public sector banks in India.
26. Name two private sector banks in India.
27. What is meant by loan?
28. What is the role of commercial banks in trade?
29. Define the term ‘credit’.
30. What is the main difference between demand deposit and time deposit?
31. What is the purpose of issuing currency by central bank?
32. How does central bank regulate credit in the economy?
33. Name any two tools of quantitative credit control.
34. Name any two tools of qualitative credit control.
35. What do you mean by margin requirement?
36. How does moral suasion work as a credit control tool?
37. Who appoints the Governor of RBI?
38. What is the full form of RBI?
39. What is meant by banker to the government?
40. Define cash credit.
41. What is the difference between repo rate and reverse repo rate?
42. How do banks encourage savings in the economy?
43. What is the significance of the bank rate?
44. How do commercial banks help in economic development?
45. Name one difference between a central bank and a commercial bank.
46. What is monetary stability?
47. What is the need for a central bank in a country?
48. Define inflation targeting.
49. What is financial inclusion?
50. Why are banks considered financial intermediarie
