📚 CBSE Grade-10 Study Guide Open in the Study Guide single page app →
HomeSocial Science

Social Science — CBSE Class 10 board question

Q1. [1]
In one of the small villages, a farmer borrows money from the village moneylender at a high monthly interest rate but is not able to repay it back. Next, he borrows it from a bank at a lower interest rate. Gradually he earns and pays back the loan to the moneylender and the bank. Which of the following best describes the role of the bank in this credit situation ?
  1. (A) The bank acts as a cooperative lender.
  2. (B) The bank facilitates a debt-trap situation.
  3. (C) The bank ensures a fair exchange of goods.
  4. (D) The bank saves the farmer from debt-trap.
Previously asked in CBSE board exam
2024 32/5/1 Q15
Generated by claude-sonnet-4-6 · 2026-06-15 06:53 · grounding rag
Model Answer

(D) The bank saves the farmer from debt-trap.

The bank provides credit at a lower interest rate, helping the farmer repay the high-interest moneylender loan and gradually become debt-free.

Source: Money and Credit, Formal Sector Credit in India

Explanation

The key concept here is debt-trap — when high interest rates make repayment impossible, trapping the borrower in increasing debt. The bank (formal sector) offers lower interest rates, enabling the farmer to repay and escape this trap. Options A and C are irrelevant; B is the opposite of what happens. Examiners expect you to connect "lower interest rate → repayment possible → no debt-trap."

If a question refers to an image, map, graph or diagram that is not shown here, open the Study Guide single page app, go to Library and find the actual CBSE question paper. The original papers are also available on the CBSE website: cbse.gov.in.
Previous-year CBSE Grade 10 board exam questions, organised by subject and chapter, each with a model answer — free to read and print.