Class 7 Social Science Chapter 8: Banks and the Magic of Finance — practice questions with answers
Free practice for Class 7 Social Science, Chapter 8: Banks and the Magic of Finance. Try the solved questions below, then take a free test with instant marking and explanations.
25 questions8 easy, 12 medium, 5 hardNCERT · CBSE · State boards
Sample questions with solutions
Q1. What is a bank?
- A financial institution that collects deposits and lends money as loans
- A shop selling goods
- A government school
- A post box
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Answer: A. A financial institution that collects deposits and lends money as loans
Why: Banks take deposits from savers and lend to borrowers. [p.194]
Why: Banks take deposits from savers and lend to borrowers. [p.194]
Q2. Why is depositing savings in a bank better than keeping cash in a cupboard?
- It is safer and earns interest
- Banks charge no rules
- Cash in a cupboard grows
- Banks give gifts daily
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Answer: A. It is safer and earns interest
Why: Banks keep money safe and pay interest. [p.195–197]
Why: Banks keep money safe and pay interest. [p.195–197]
Q3. The extra money a bank pays depositors on their savings is called ______.
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Answer: interest
Why: Interest helps savings grow over time. [p.197]
Why: Interest helps savings grow over time. [p.197]
Q4. Which bank supervises India’s banking system and prints currency?
- Reserve Bank of India
- State Bank of India
- NABARD
- Post Office
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Answer: A. Reserve Bank of India
Why: The RBI sets rules, prints notes and fixes benchmark interest rates. [p.202]
Why: The RBI sets rules, prints notes and fixes benchmark interest rates. [p.202]
Q5. What is a cheque?
- A paper instrument to pay someone directly from your bank account
- A type of coin
- A loan form
- A share certificate
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Answer: A. A paper instrument to pay someone directly from your bank account
Why: The payee deposits it and the amount is debited from the payer. [p.204]
Why: The payee deposits it and the amount is debited from the payer. [p.204]
Q6. What is a share in a company?
- A small piece of ownership in the company
- A loan from a bank
- A cheque
- A savings account
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Answer: A. A small piece of ownership in the company
Why: If a company is a chapati, each share is one piece. [p.208]
Why: If a company is a chapati, each share is one piece. [p.208]
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How many practice questions are there for Class 7 Social Science Chapter 8: Banks and the Magic of Finance?
25 questions (8 easy, 12 medium, 5 hard). A few are solved on this page; the free test shows the answer and explanation for every question after you submit.
Is this chapter from the NCERT book?
Yes — it follows the NCERT Class 7 Social Science syllabus, used by CBSE and many state boards.