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Class 10 Money And Credit best notes
Class 10 Money And Credit best notes | Class 10 Money and credit | class 10 notes
Introduction – Class 10 Money And Credit best notes
In the world of economics, the concepts of money and credit hold significant importance. These fundamental aspects have played a crucial role in shaping our modern economic system. In this article, we will delve into the key aspects of money and credit, their evolution, and their impact on our daily lives.
Understanding the Barter System – Class 10 Money And Credit best notes
In the early days, individuals engaged in a barter system where goods and services were exchanged directly. However, this system had limitations as it required a coincidence of wants between two parties for an exchange to occur.
The Emergence of Money – Class 10 Money And Credit best notes
Money emerged as a revolutionary solution to the limitations of the barter system. It serves as a medium of exchange, eliminating the need for a double coincidence of wants. In its early forms, money was crafted from everyday items.
Modern Currency – Class 10 Money And Credit best notes
Today, we use coins and paper currency made from affordable metals. Interestingly, modern currency holds no intrinsic value; its worth is derived solely from government approval. In India, the Reserve Bank is the sole authority to print money, and the Indian rupee is the official currency.
Banking and Deposits – Class 10 Money And Credit best notes
People deposit their surplus money in banks. Banks not only provide a safe haven for money but also offer interest on deposits, leading to the term ‘demand deposits.’ To deposit money, one simply needs a bank account. Moreover, checks have replaced cash for receiving money from bank deposits, providing a convenient and efficient method.
Key Terminology – Class 10 Money And Credit best notes
Before we proceed further, let’s familiarize ourselves with some important terms:
- Barter System: The direct exchange of products and services without the use of currency.
- Money: Anything accepted as a means of trade, including coins and banknotes.
- Cheque: A written directive to withdraw a specific amount from an account and pay it to a recipient.
- Reserve Bank of India: The sole authority to print banknotes and coins on behalf of the national government.
- Investment: Funds spent with the aim of generating income or capital appreciation.
Exploring Credit – Class 10 Money And Credit best notes
Moving on to the concept of credit, it plays a significant role in our economic system. Banks maintain a portion of their deposits in cash to facilitate daily withdrawals while using the remaining funds to provide loans to individuals.
Terms of Credit – Class 10 Money And Credit best notes
The terms of credit include a specific interest rate, and often, borrowers are required to provide collateral as security against non-repayment. Collateral can take various forms, including real estate, automobiles, livestock, and bank savings.
Eligibility for Loans – Class 10 Money And Credit best notes
To be eligible for a loan, borrowers must provide documentation of their identification, residence, employment, and income. In cases of non-repayment, lenders retain the right to sell collateral to recover the loan balance.
Types of Credit Sources – Class 10 Money And Credit best notes
Credit can be obtained from various sources, both formal and informal. Let’s explore some of these sources:
- Banks: Formal financial institutions that accept deposits and provide loans.
- Traders: Businesses that offer credit to customers.
- Cooperative Societies: Organizations that provide financial assistance to their members.
- Landlords: Property owners who may extend credit to tenants.
- Moneylenders: Individuals who lend money independently.
- Relatives and Friends: Informal sources of credit among acquaintances.
Key Credit Terminology – Class 10 Money And Credit best notes
To better understand the credit landscape, here are some key terms:
- Credit: Providing money on credit to those in need.
- Financial Formal Institutions: Official credit institutions like commercial banks and cooperatives.
- Financial Informal Institutions: Informal sources such as moneylenders, self-help groups, and private finance corporations.
- Commercial Bank: An institution that accepts deposits and provides loans.
- Loans: Funds provided for a specified period, requiring full repayment.
- Collateral: Security offered against a loan, which may be auctioned if the loan is not repaid.
Conclusion – Class 10 Money And Credit best notes
In conclusion, the concepts of money and credit are fundamental to our economic system. Money has transformed the way we trade, while credit has empowered individuals and businesses to access financial resources. Understanding these concepts is crucial for making informed financial decisions in our daily lives.