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Read the given source and… (Social Science 2025 32/2/1 Q36)

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Social ScienceCBSE Class 10 · Board exam 2025, set 32/2/1 · 4 marks · Case-based

CBSE Class 10 Social Science 2025: question 36

Set in the CBSE Class 10 board exam of 2025, paper 32/2/1, section E, question 36, for 4 marks. Try it first; the hints and our step-by-step solution are below.

Q36 · 4 marks · Case-basedCompetency-basedMoney and Credit

Read the given source and answer the questions that follow:
Arun's Story
Arun supervises the work of one farm labourer. Arun has seven acres of land. He is one of the few persons in Sonpur to receive bank loan for cultivation. The interest rate on the loan is 8·5 per cent per annum, and can be repaid anytime in the next three years. Arun plans to repay the loan after harvest by selling a part of the crop. He then intends to store the rest of the potatoes in a cold storage and apply for a fresh loan from the bank against the cold storage receipt. The bank offers this facility to farmers who have taken crop loan from them.

  1. (36.1)

    Under which source does Arun's loan come?

    1 mark
  2. (36.2)

    Mention one important term of credit for taking a loan from the bank.

    1 mark
  3. (36.3)

    How is Arun's loan beneficial? Explain any two reasons.

    2 marks

Source: official question paper from cbse.gov.in (PDF). See it in the full 2025 board paper, set 32/2/1.

Hints

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

Hint 1

Is a bank a formal or an informal lender?

Hint 2

Think of what a lender asks before giving a loan: interest, security, documents.

Hint 3

Look at the interest rate and the repayment period in the passage.

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. (i) Arun's loan comes from the formal source, since it is a bank loan.

    1 mark

  2. (ii) An important term of credit is the interest rate (others: collateral, documentation, mode of repayment).

    1 mark

  3. (iii) The interest rate is low at 8.5% per annum, so the cost of borrowing is small.

    1 mark

  4. (iii) It can be repaid any time within three years, after the harvest, and he can take a fresh loan against the cold storage receipt. This helps him save capital and buy inputs.

    1 mark

Answer: (i) Formal source (bank). (ii) Interest rate (or collateral, documentation, mode of repayment). (iii) Low interest of 8.5% and flexible repayment within three years.

Where the marks are

  • (i) Formal source / bank (1 mark)
  • (ii) One term of credit such as interest rate or collateral (1 mark)
  • (iii) Low rate of interest (1 mark)
  • (iii) Easy repayment, up to three years, and fresh loan facility (1 mark)

Revise the chapter

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 paper2025 board paper, set 32/2/1: 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.