3:
Money and Credit
A. MCQs
1. What is the main function of
money?
A) Store goods
B) Medium of exchange
C) Produce goods
D) Increase population
Answer: B) Medium of
exchange
2. In a barter system, exchange
takes place through:
A) Money
B) Cheques
C) Direct exchange of goods
D) Banks
Answer: C) Direct
exchange of goods
3. Double coincidence of wants is
necessary in:
A) Banking system
B) Credit system
C) Barter system
D) Modern economy
Answer: C) Barter
system
4. Who issues currency notes in
India?
A) SBI
B) RBI
C) NABARD
D) Commercial Banks
Answer: B) RBI
5. Which of the following is not a
modern form of money?
A) Currency notes
B) Coins
C) Demand deposits
D) Cattle
Answer: D) Cattle
6. Money eliminates the need for:
A) Production
B) Consumption
C) Double coincidence of wants
D) Trade
Answer: C) Double
coincidence of wants
7. Deposits that can be withdrawn
anytime are called:
A) Fixed deposits
B) Demand deposits
C) Recurring deposits
D) Savings bonds
Answer: B) Demand
deposits
8. Which of the following is considered
money in the modern economy?
A) Demand deposits only
B) Currency only
C) Currency and demand deposits
D) Gold only
Answer: C) Currency
and demand deposits
9. A cheque is:
A) A type of currency
B) A paper instructing a bank to pay money
C) A loan document
D) A collateral document
Answer: B) A paper
instructing a bank to pay money
10. Demand deposits are accepted
widely because:
A) They earn high interest
B) They can be used through cheques
C) They are made of paper
D) They are compulsory
Answer: B) They can be
used through cheques
11. Banks keep only a small
percentage of deposits as:
A) Loans
B) Investments
C) Cash reserves
D) Profits
Answer: C) Cash
reserves
12. Banks earn income mainly
through:
A) Taxes
B) Donations
C) Difference in interest rates
D) Printing money
Answer: C) Difference
in interest rates
13. Credit refers to:
A) Savings in banks
B) Exchange of goods
C) Loan arrangement
D) Insurance policy
Answer: C) Loan
arrangement
14. In a credit arrangement, the
borrower promises:
A) Immediate repayment
B) Future repayment
C) Free service
D) No repayment
Answer: B) Future
repayment
15. Credit plays a positive role
when:
A) Income increases due to borrowing
B) Crops fail
C) Debt increases continuously
D) Assets are sold
Answer: A) Income
increases due to borrowing
16. Which case in the chapter shows
positive use of credit?
A) Rama
B) Swapna
C) Salim
D) Shyamal
Answer: C) Salim
17. Swapna's situation is an example
of:
A) Profit maximisation
B) Debt trap
C) Banking success
D) Investment growth
Answer: B) Debt trap
18. A debt trap occurs when:
A) Loans increase income
B) Borrower saves money
C) Borrower cannot repay and takes more loans
D) Banks reduce interest rates
Answer: C) Borrower
cannot repay and takes more loans
19. The amount borrowed is called:
A) Interest
B) Deposit
C) Principal
D) Collateral
Answer: C) Principal
20. Interest is:
A) Extra amount paid over the
principal
B) Total loan amount
C) Bank deposit
D) Security asset
Answer: A) Extra
amount paid over the principal
21. Collateral is:
A) Interest paid to bank
B) Asset used as security for a loan
C) Deposit account
D) Currency note
Answer: B) Asset used
as security for a loan
22. Which of the following can be
used as collateral?
A) Land
B) Building
C) Livestock
D) All of these
Answer: D) All of
these
23. Terms of credit include:
A) Interest rate
B) Collateral
C) Repayment conditions
D) All of these
Answer: D) All of
these
24. Megha took a loan for:
A) Education
B) House purchase
C) Farming
D) Business
Answer: B) House
purchase
25. Which farmer received a bank
loan in Sonpur?
A) Shyamal
B) Rama
C) Arun
D) Salim
Answer: C) Arun
26. Shyamal borrowed mainly from:
A) RBI
B) Agricultural trader
C) Cooperative bank
D) SHG
Answer: B)
Agricultural trader
27. Rama borrowed from:
A) Commercial bank
B) Cooperative society
C) Employer/landowner
D) RBI
Answer: C)
Employer/landowner
28. Which source generally charges
the highest interest?
A) Commercial banks
B) Cooperative societies
C) Moneylenders
D) RBI
Answer: C)
Moneylenders
29. Cooperative societies mainly
provide:
A) Cheap credit
B) Currency notes
C) Tax collection
D) Insurance only
Answer: A) Cheap
credit
30. Formal sources of credit
include:
A) Banks and cooperatives
B) Moneylenders and traders
C) Friends and relatives
D) Employers
Answer: A) Banks and cooperatives
31. Informal sources of credit
include:
A) Banks
B) Cooperatives
C) Moneylenders
D) RBI
Answer: C)
Moneylenders
32. Which institution supervises
formal credit in India?
A) NABARD
B) RBI
C) SBI
D) LIC
Answer: B) RBI
33. Formal credit is generally:
A) Expensive
B) Unregulated
C) Cheap and regulated
D) Illegal
Answer: C) Cheap and
regulated
34. Informal credit is generally:
A) Regulated by RBI
B) Low-cost
C) High-cost
D) Government-controlled
Answer: C) High-cost
35. Which is a disadvantage of informal
credit?
A) Easy access
B) High interest rates
C) Less paperwork
D) Quick availability
Answer: B) High
interest rates
36. Cheap credit is important
because it:
A) Increases debt burden
B) Encourages development
C) Stops production
D) Reduces employment
Answer: B) Encourages
development
37. Most poor households depend on:
A) Formal credit
B) Informal credit
C) Foreign loans
D) Government grants
Answer: B) Informal
credit
38. Why do banks hesitate to lend to
poor borrowers?
A) Lack of collateral
B) High income
C) Large deposits
D) Easy repayment
Answer: A) Lack of
collateral
39. SHG stands for:
A) Social Help Group
B) Self Help Group
C) Self Housing Group
D) Social Housing Group
Answer: B) Self Help
Group
40. SHGs are usually formed by:
A) Rich businessmen
B) Government officials
C) Rural poor, especially women
D) Bank managers
Answer: C) Rural poor,
especially women
41. A typical SHG consists of:
A) 2–5 members
B) 5–10 members
C) 15–20 members
D) 50–100 members
Answer: C) 15–20
members
42. SHG members save:
A) Regularly
B) Once in five years
C) Only during festivals
D) Never
Answer: A) Regularly
43. Banks are willing to lend to
SHGs because:
A) They are rich
B) They have gold reserves
C) Group members ensure repayment
D) RBI forces banks
Answer: C) Group members
ensure repayment
44. SHGs help poor people overcome
the problem of:
A) Inflation
B) Lack of collateral
C) Production
D) Transportation
Answer: B) Lack of
collateral
45. Which of the following is a
benefit of SHGs?
A) Financial independence of women
B) Social awareness
C) Easy access to loans
D) All of these
Answer: D) All of
these
46. Demonetisation in India took
place in:
A) 2014
B) 2015
C) 2016
D) 2018
Answer: C) 2016
47. During demonetisation, which
notes were withdrawn?
A) ₹100 and ₹200
B) ₹500 and ₹1000
C) ₹50 and ₹100
D) ₹200 and ₹500
Answer: B) ₹500 and
₹1000
48. Which digital payment system is
mentioned in the chapter?
A) UPI
B) POS Machines
C) Internet Banking
D) All of these
Answer: D) All of
these
49. Which bank is famous for
providing microcredit to poor women?
Grameen Bank
A) SBI
B) Grameen Bank
C) RBI
D) NABARD
Answer: B) Grameen
Bank
50. Who founded Grameen Bank?
A) Amartya Sen
B) Raghuram Rajan
C) Muhammad Yunus
D) Manmohan Singh
Answer: C) Muhammad
Yunus
B. Short Answer Questions
1. What are the functions of money?
Answer:
- Acts as a medium of exchange.
- Helps in buying and selling goods and
services.
- Eliminates double coincidence of wants.
- Facilitates smooth economic transactions.
2. What is double coincidence of wants?
Answer:
- A situation where two persons need each
other's goods.
- Essential in the barter system.
- Makes exchange difficult.
- Eliminated by money.
3. Why is money preferred over barter?
Answer:
- Easy to carry and use.
- Accepted by everyone.
- Eliminates double coincidence of wants.
- Saves time and effort in transactions.
4. Why is modern currency accepted as money?
Answer:
- Issued by the government.
- Guaranteed by RBI.
- Legally accepted for payments.
- Functions as legal tender.
5. What are demand deposits?
Answer:
- Deposits kept in bank accounts.
- Can be withdrawn anytime.
- Earn interest.
- Can be used for payments through cheques.
6. Why are demand deposits considered money?
Answer:
- Easily withdrawable.
- Accepted widely as payment.
- Can be transferred through cheques.
- Perform the function of money.
7. What is a cheque?
Answer:
- A written order to a bank.
- Instructs the bank to pay a specific amount.
- Enables cashless transactions.
- Transfers money between accounts.
8. Explain the role of banks in an economy.
Answer:
- Accept deposits from people.
- Provide loans to borrowers.
- Promote savings.
- Facilitate economic activities.
9. How do banks earn profit?
Answer:
- Accept deposits at lower interest rates.
- Give loans at higher interest rates.
- Earn the difference between the two rates.
- Charge service fees on banking services.
10. What is credit?
Answer:
- An agreement between lender and borrower.
- Money, goods or services are provided now.
- Repayment is made later.
- Usually includes interest.
11. How does credit help production?
Answer:
- Provides working capital.
- Helps purchase raw
materials.
- Enables hiring workers.
- Increases production and
income.
12. How can credit become harmful?
Answer:
- Crop failure may prevent
repayment.
- Interest burden increases
debt.
- Borrowers may fall into a
debt trap.
- Assets may need to be
sold.
13. What is a debt trap?
Answer:
- A situation of continuous
indebtedness.
- Borrower takes new loans
to repay old ones.
- Debt keeps increasing.
- Financial condition
worsens.
14. What are the terms of credit?
Answer:
- Interest rate.
- Collateral required.
- Documentation needed.
- Conditions of repayment.
15. What is collateral?
Answer:
- Asset used as security
for a loan.
- Protects the lender
against default.
- Can be land, house,
vehicle etc.
- May be seized if loan is
not repaid.
16. Why do lenders demand collateral?
Answer:
- Reduces lending risk.
- Ensures repayment.
- Provides legal security.
- Protects lender's money.
17. What are formal sources of credit?
Answer:
- Banks.
- Cooperative societies.
- Regulated by RBI.
- Charge relatively lower
interest.
18. What are informal sources of credit?
Answer:
- Moneylenders.
- Traders.
- Employers.
- Friends and relatives.
19. Give any four features of formal credit.
Answer:
- Regulated by RBI.
- Lower interest rates.
- Legal procedures
followed.
- Safer for borrowers.
20. Give any four features of informal credit.
Answer:
- Not regulated by RBI.
- High interest rates.
- Easy availability.
- Possibility of
exploitation.
21. Why is formal credit better than informal credit?
Answer:
- Lower interest rates.
- Fair lending practices.
- Legal protection.
- Reduces debt burden.
22. What are the functions of RBI regarding banks?
Answer:
- Supervises banks.
- Monitors cash reserves.
- Regulates lending
activities.
- Ensures banking
stability.
23. Why should formal sources of credit be expanded?
Answer:
- To reduce dependence on
moneylenders.
- To provide affordable
loans.
- To prevent debt traps.
- To support economic
development.
24. Why do poor people often depend on informal credit?
Answer:
- Lack of collateral.
- Lack of documents.
- Easier access to loans.
- Banks may refuse loans.
25. What are Self Help Groups (SHGs)?
Answer:
- Small groups of poor people.
- Usually consist of women.
- Members save regularly.
- Provide loans to members.
26. How do SHGs help the poor?
Answer:
- Provide loans at
reasonable rates.
- Reduce dependence on
moneylenders.
- Encourage savings.
- Improve financial
security.
27. Why are banks willing to lend to SHGs?
Answer:
- Members ensure repayment.
- Group responsibility
reduces risk.
- Regular savings create
trust.
- High repayment rates.
28. State four benefits of SHGs.
Answer:
- Easy access to credit.
- Financial independence
for women.
- Promotion of savings
habits.
- Social awareness and
empowerment.
29. Why is cheap credit important for development?
Answer:
- Encourages investment.
- Supports business
activities.
- Increases employment.
- Improves income levels.
30. Differentiate between formal and informal credit. (Any 4 points)
Answer:
|
Formal Credit |
Informal Credit |
|
Regulated by RBI |
Not regulated |
|
Lower interest rates |
Higher interest rates |
|
Includes banks and
cooperatives |
Includes moneylenders and
traders |
|
Safer and transparent |
Risk of exploitation |
These 30 questions cover the
most frequently asked 2-mark, 3-mark and 4-mark CBSE board-style questions
from the Money and Credit chapter.
C. Long Answer Questions
1. Explain how money solves the
problem of double coincidence of wants.
Answer:
·
In
a barter system, exchange requires double coincidence of wants.
·
Both
parties must need each other's goods at the same time.
·
Finding
such people is difficult and time-consuming.
·
Money
acts as a common medium of exchange.
·
Goods
are first sold for money and then money is used to buy required goods.
·
Thus,
money removes the difficulties of barter.
2. Explain the importance of money
in modern economic life.
Answer:
·
Money
acts as a medium of exchange.
·
It
facilitates buying and selling of goods and services.
·
It
eliminates the problem of double coincidence of wants.
·
It
helps in measuring the value of goods.
·
It
encourages trade and economic activities.
·
It
makes transactions easy and convenient.
3. Explain the modern forms of
money.
Answer:
·
Modern
forms of money include currency and demand deposits.
·
Currency
consists of paper notes and coins.
·
Currency
is issued by RBI on behalf of the government.
·
Demand
deposits are money kept in bank accounts.
·
Demand
deposits can be withdrawn whenever required.
·
Both
currency and demand deposits are widely accepted as money.
4. Why are demand deposits
considered as money?
Answer:
·
Demand
deposits can be withdrawn at any time.
·
They
are accepted widely as a means of payment.
·
Payments
can be made through cheques.
·
They
possess the essential feature of money.
·
They
help in cashless transactions.
·
They
are an important part of the modern monetary system.
5. Explain the role of banks in the
economy.
Answer:
·
Banks
accept deposits from the public.
·
They
keep a small portion as cash reserves.
·
The
remaining amount is lent to borrowers.
·
Banks
act as intermediaries between depositors and borrowers.
·
They
promote savings and investments.
·
They
support economic growth through credit creation.
6. Explain the loan activities of
banks.
Answer:
·
Banks
receive deposits from people.
·
A
small amount is kept as reserve cash.
·
Most
deposits are used to provide loans.
·
Loans
are given for business, farming and other activities.
·
Borrowers
repay loans with interest.
·
Interest
earned is a major source of income for banks.
7. Explain the positive role of
credit with the example of Salim.
Answer:
·
Salim
received a large order for shoes.
·
He
needed money for labour and raw materials.
·
He
obtained loans from a trader and supplier.
·
The
loan helped him complete production.
·
He
sold the shoes and earned profits.
·
He
repaid the loan successfully and improved his income.
8. Explain how credit can push a
borrower into a debt trap.
Answer:
·
Borrowers
may take loans expecting future income.
·
Unexpected
losses may reduce earnings.
·
Loan
repayment becomes difficult.
·
New
loans are taken to repay old loans.
·
Debt
keeps increasing over time.
·
The
borrower may lose assets and become poorer.
9. Explain Swapna's situation as an
example of debt trap.
Answer:
·
Swapna
borrowed money for cultivation.
·
Her
crop was damaged by pests.
·
She
failed to earn enough income.
·
Repayment
of the loan became impossible.
·
She
borrowed again the next year.
·
Finally,
she had to sell part of her land to repay the debt.
10. What are the terms of credit?
Explain.
Answer:
·
Terms
of credit are conditions attached to a loan.
·
Interest
rate is one important condition.
·
Lenders
may demand collateral.
·
Documentation
requirements vary.
·
Repayment
period and method are specified.
·
These
conditions differ from one lender to another.
11. Explain the importance of
collateral in a loan agreement.
Answer:
·
Collateral
is an asset pledged as security.
·
It
protects the lender from loss.
·
It
reduces the risk of non-payment.
·
It
increases the borrower's credibility.
·
Banks
usually require collateral before lending.
·
Assets
such as land, buildings and vehicles can be used.
12. Describe the credit arrangements
in Sonpur village.
Answer:
·
Farmers
borrow from banks, traders and moneylenders.
·
Labourers
often borrow from employers.
·
Different
borrowers face different terms of credit.
·
Bank
loans have lower interest rates.
·
Informal
lenders charge higher interest.
·
Access
to cheap credit depends on collateral and income.
13. Compare the situations of
Shyamal and Arun.
Answer:
·
Shyamal
is a small farmer while Arun is a medium farmer.
·
Shyamal
borrows from traders at higher interest.
·
Arun
receives bank loans at lower interest.
·
Arun
can store crops and sell later.
·
Shyamal
must sell crops immediately.
·
Arun
earns higher income from cultivation.
14. Explain the differences between
formal and informal sources of credit.
Answer:
·
Formal
credit is regulated by RBI.
·
Informal
credit is not regulated.
·
Formal
sources charge lower interest rates.
·
Informal
lenders often charge high interest.
·
Banks
and cooperatives are formal sources.
·
Moneylenders
and traders are informal sources.
15. Why are informal sources of
credit harmful for borrowers?
Answer:
·
They
charge very high interest rates.
·
Borrowers
often fall into debt traps.
·
There
is no official supervision.
·
Lenders
may use unfair practices.
·
Loan
terms are often unfavourable.
·
Borrowers
may lose a large part of their income.
16. Explain the role of RBI in the
banking system.
Answer:
·
RBI
supervises banks in India.
·
It
regulates lending activities.
·
It
ensures banks maintain cash reserves.
·
It
issues currency notes.
·
It
protects depositors' interests.
·
It
promotes stability in the financial system.
17. Why should formal sources of
credit be expanded in India?
Answer:
·
Many
people still depend on moneylenders.
·
Formal
loans are cheaper.
·
They
reduce exploitation of borrowers.
·
They
encourage investment and production.
·
They
help prevent debt traps.
·
They
promote overall economic development.
18. Why do poor households depend
heavily on informal credit?
Answer:
·
They
often lack collateral.
·
They
may not have proper documents.
·
Banks
may reject their applications.
·
Informal
loans are easily available.
·
Moneylenders
know borrowers personally.
·
Urgent
financial needs force them to borrow informally.
19. Explain the importance of affordable
credit for development.
Answer:
·
Affordable
credit supports investment.
·
It
helps expand businesses.
·
Farmers
can increase production.
·
Employment
opportunities increase.
·
Incomes
improve over time.
·
Economic
growth and development are promoted.
20. Explain the basic idea behind
Self Help Groups (SHGs).
Answer:
·
SHGs
are small groups of poor people.
·
Members
save money regularly.
·
Savings
are pooled together.
·
Members
can borrow from the group.
·
Banks
provide loans to well-functioning SHGs.
·
SHGs
improve access to credit.
21. How do SHGs help poor women?
Answer:
·
They
provide loans without collateral.
·
Women
develop saving habits.
·
Financial
independence increases.
·
Dependence
on moneylenders decreases.
·
Women
participate in decision-making.
·
Social
awareness and confidence improve.
22. Why are SHGs considered an
effective source of credit?
Answer:
·
Regular
savings create trust.
·
Group
responsibility ensures repayment.
·
Loans
are available at reasonable rates.
·
Banks
are willing to lend to SHGs.
·
Poor
people gain access to formal credit.
·
Financial
inclusion improves.
23. Explain the advantages of SHGs
over moneylenders.
Answer:
·
Lower
interest rates.
·
No
exploitation of borrowers.
·
Loans
available without collateral.
·
Collective
decision-making.
·
Encourages
savings.
·
Improves
social and economic conditions.
24. Discuss the importance of banks
and cooperatives in rural areas.
Answer:
·
Provide
cheap credit.
·
Support
agricultural activities.
·
Reduce
dependence on moneylenders.
·
Encourage
savings among villagers.
·
Help
in rural development.
·
Improve
living standards.
25. Why is cheap and affordable
credit crucial for a country's development?
Answer:
·
Supports
productive activities.
·
Encourages
entrepreneurship.
·
Creates
employment opportunities.
·
Increases
agricultural and industrial output.
·
Raises
income levels.
·
Promotes
economic growth.
26. Explain the disadvantages of
borrowing from moneylenders.
Answer:
·
High
interest rates.
·
Risk
of exploitation.
·
Lack
of legal protection.
·
Borrowers
may fall into debt traps.
·
Unfair
repayment conditions.
·
Reduced
income due to heavy debt burden.
27. Explain the significance of
credit in economic activities.
Answer:
·
Helps
finance production.
·
Enables
purchase of raw materials.
·
Supports
business expansion.
·
Increases
employment opportunities.
·
Improves
income generation.
·
Contributes
to economic growth.
28. Why do banks prefer lending to
richer households?
Answer:
·
Rich
households can provide collateral.
·
They
have stable incomes.
·
Repayment
risk is lower.
·
Better
documentation is available.
·
Credit
history is stronger.
·
Banks
consider them more reliable borrowers.
29. Explain how formal credit can
reduce poverty.
Answer:
·
Provides
affordable loans.
·
Helps
people start businesses.
·
Increases
income opportunities.
·
Reduces
dependence on moneylenders.
·
Prevents
debt traps.
·
Promotes
economic self-reliance.
30. Analyse the role of credit for
development.
Answer:
·
Credit
provides funds for economic activities.
·
It
supports agriculture, trade and industries.
·
It
helps increase production and income.
·
Affordable
credit promotes employment generation.
·
Expensive
credit may create debt traps.
·
Therefore,
accessible and affordable credit is essential for sustainable development.
D. Assertion & Reason Questions
Directions: Choose the correct option.
A. Both Assertion (A) and Reason (R)
are true, and R is the correct explanation of A.
B.
Both A and R are true, but R is not the correct explanation of A.
C. A
is true, but R is false.
D. A
is false, but R is true.
1. Assertion (A):
Money eliminates the need for double coincidence of wants.
Reason (R): Money
acts as a medium of exchange.
Answer: A
2. Assertion (A):
Barter system is difficult to operate in modern economies.
Reason (R):
Barter requires double coincidence of wants.
Answer: A
3. Assertion (A):
Demand deposits are considered money.
Reason (R): They
can be withdrawn on demand and used through cheques.
Answer: A
4. Assertion (A):
Modern currency has no use of its own.
Reason (R): It is
accepted because it is authorised by the government.
Answer: A
5. Assertion (A):
RBI issues currency notes in India.
Reason (R): RBI
is the central bank of India authorised to issue currency.
Answer: A
6. Assertion (A):
Banks keep all deposits as cash.
Reason (R): Banks
use most deposits for giving loans.
Answer: D
7. Assertion (A):
Banks act as intermediaries between depositors and borrowers.
Reason (R): Banks
collect deposits and lend money to those who need loans.
Answer: A
8. Assertion (A):
Credit always improves the condition of borrowers.
Reason (R):
Credit can sometimes lead to a debt trap.
Answer: D
9. Assertion (A):
Salim's case shows a positive role of credit.
Reason (R):
Credit helped him complete production and earn profit.
Answer: A
10. Assertion
(A): Swapna's case is an example of a debt trap.
Reason (R): Crop
failure made loan repayment difficult.
Answer: A
11. Assertion
(A): Collateral is demanded by lenders before granting loans.
Reason (R): It
acts as security against non-repayment.
Answer: A
12. Assertion
(A): Formal credit is regulated by RBI.
Reason (R): RBI
supervises the functioning of banks.
Answer: A
13. Assertion
(A): Informal lenders generally charge higher interest rates.
Reason (R): There
is no authority regulating their lending activities.
Answer: A
14. Assertion
(A): Formal loans are generally cheaper than informal loans.
Reason (R): Banks
and cooperatives charge lower rates of interest.
Answer: A
15. Assertion
(A): Poor households depend more on informal sources of credit.
Reason (R): Many
poor people lack collateral required by banks.
Answer: A
16. Assertion
(A): Cheap credit is important for economic development.
Reason (R): It
encourages production, trade and employment.
Answer: A
17. Assertion
(A): Self Help Groups help poor people obtain credit.
Reason (R): SHGs
provide loans without requiring collateral from members.
Answer: A
18. Assertion
(A): Banks are willing to lend to SHGs.
Reason (R): Group
members ensure repayment of loans.
Answer: A
19. Assertion
(A): Moneylenders are formal sources of credit.
Reason (R): They
are supervised by RBI.
Answer: D
20. Assertion
(A): Expansion of formal credit can reduce dependence on moneylenders.
Reason (R):
Formal credit provides loans at reasonable interest rates.
Answer: A
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