MONEY AND CREDIT NOTES FOR CLASS 10 ECONOMICS

Money and Credit Class 10 Economics Notes is an ideal guide to learning one of the most important chapters in your study material.

Notes on Money and Credit discuss how money simplifies trade and transaction, and how credit facilitates individuals and businesses to expand.

Further, they make learning important concepts such as money in the modern form, functions of banks, and formal and informal sources of credit easy.

As you work through these Money and Credit Notes, you will not only understand the functioning of our financial system but also how money and credit

affect our everyday life.

Hence, with a proper understanding and frequent revision, you can get full marks and have a solid foundation for higher studies in Economics.

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MONEY AND CREDIT NOTES FOR CLASS 10 ECONOMICS

1. Introduction to Money and Credit

Money and Credit are fundamental elements of our economic existence.

Money is a medium of exchange that eliminates the issue of barter, and credit is used by individuals and firms to fulfill their financial obligations.

Grasping both allows us to realize how the economy runs smoothly.

2. Evolution and Functions of Money

Evolution:

In the past, commodities were traded by the barter system, which raised issues of double coincidence of wants.

Functions of Money:

Medium of exchange

Measure of value

Store of value

Standard of deferred payments

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3. Modern Forms of Money

Currently, money comes in forms:

Currency: Coins and paper currency issued by Reserve Bank of India.

Deposits at Banks: Individuals put money into banks, which can be withdrawn by cheques, ATMs, or internet transactions.

These deposits are also regarded as money since they can be spent.

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4. Function of Commercial Banks

Commercial banks have a significant role in:

Accepting deposit and safe-keeping money.

Granting loans and advances to customers and businesses.

Encouraging saving and investments.

Enabling trade and payments through cheques and electronic banking.

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5. Types of Credit – Formal and Informal Sources

Formal Credit:

Offered by banks and cooperatives. These institutions are regulated by the RBI and bear less interest.

Informal Credit:

Offered by moneylenders, traders, or relatives. These are not regulated and tend to charge more interest.

6. Credit Terms and Collateral

Every loan comes with terms like rate of interest, time frame, repayment method, and security.

Collateral: It is a property which a borrower retains with the lender as collateral to repay the loan.

Good collateral and repayment history result in smoother access to loans.

7. Reserve Bank of India (RBI) Role

The RBI issues government money.

It controls the banks’ operations to ensure equitable transactions.

Moreover, It guides the supply of money and availability of credit in the economy.

Also, It ensures banks keep a minimum cash balance and extend loans in a responsible manner.

8. Self Help Groups (SHGs) and Rural Credit

Self Help Groups are small groups of rural individuals, primarily women, who save together and lend money to group members at affordable rates.

These SHGs encourage self-employment and less reliance on moneylenders.

They also assist in financial inclusion and women empowerment.

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9. Advantages and Disadvantages of Credit (Optional)

Advantages: Facilitates financing needs, encourages business and investment.

Disadvantages: If not managed prudently, it can be a debt trap or a loss of collateral.

10. Summary and Key Takeaways

Money makes trade easier and credit facilitates growth. Efficient lending and borrowing are, however, necessary for financial stability.

Learning about these concepts enables students to apply classroom knowledge to real-world financial systems.

MONEY AND CREDIT NOTES FOR CLASS 10 ECONOMICS

Conclusion:

Money and Credit Class 10 Economics notes are a thorough guide for the students of Class 10 Economics to comprehend one of the most useful and interesting syllabus chapters.

The notes detail how money facilitates easy purchasing and selling and how credit enables individuals to fulfill their desires, establish businesses, and elevate their standard of living.

Through these Money and Credit Notes, students can simply comprehend the function of banks, the significance of the Reserve Bank of India, and the distinction between formal and informal sources of credit.

Further, these notes prompt students to analyze critically how financial systems work in everyday life. Moreover, the Money and Credit Notes assist in fostering economic knowledge and prudent financial behavior at a young age.

Hence, by updating these notes periodically and correlating them with common examples, students not only achieve superlative marks in exams but also acquire knowledge that will be useful throughout their lifetime.

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