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How does credit play… (Class 10 Social Science 2023, Q33a)

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Social ScienceCBSE Class 10 · Board exam 2023, set 32/5/1 · 5 marks · Long answer

CBSE Class 10 Social Science 2023: question 33(a)

Set in the CBSE Class 10 board exam of 2023, paper 32/5/1, section D, question 33(a), for 5 marks. Try it first; the hints and our step-by-step solution are below.

Q33(a) · 5 marks · Long answerMoney and Credit

How does credit play a positive and a negative role ? Explain with examples.

Source: official question paper from cbse.gov.in (PDF). See it in the full 2023 board paper, set 32/5/1.

Hints

Open one hint at a time and try again before the next.

Hint 1

Credit has two sides: it can raise income or create a burden.

Hint 2

Think of a borrower whose business succeeded and one whose crop failed.

Hint 3

Recall Salim the shoe manufacturer and the farmer Swapna from NCERT.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Introduction: Credit (loan) is an agreement in which the lender supplies money, goods or services to the borrower in return for a promise of repayment later. It can help the borrower or harm the borrower.

  2. Positive role (any one point): Credit meets the ongoing expenses of production and keeps the work going. Many day-to-day transactions in the economy involve credit. If the borrower repays on time and earns a profit from the loan, he ends up better off than before.

    1 mark

  3. Example of positive role: Salim, a shoe manufacturer, took a loan to complete an order for 3000 pairs of shoes. He delivered the order on time, made a profit, repaid the loan and was better off.

    1½ marks

  4. Negative role (any one point): If the crop or business fails, the borrower cannot repay the loan. Credit then becomes painful and pushes the borrower into a debt-trap. Recovery becomes very difficult, and the borrower may have to sell part of his land to repay.

    1 mark

  5. Example of negative role: Swapna, a small farmer, took a loan for cultivation, but her crop failed. She took another loan for pesticides, but the output was still too low to repay. She fell into a debt-trap and had to sell part of her land.

    1½ marks

Answer: Credit is positive when the loan raises production and income and is repaid with profit (Salim). It is negative when the crop or business fails and the borrower falls into a debt-trap (Swapna).

Where the marks are

  • One valid point on the positive role of credit (1 mark)
  • A suitable example of the positive role (1.5 marks)
  • One valid point on the negative role of credit (1 mark)
  • A suitable example of the negative role (1.5 marks)

Revise the chapter

  • Chapter: Money and Credit (notes, formulas, where marks are lost and every past question)
Practise this chapterBoard-style questions from Money and Credit, one at a time, marked against the answer key and marking points.Back to the full paper2023 board paper, set 32/5/1: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.