What is Case Study Question / Paragraph Based Question?
A case study is a scenario in a particular academic / professional context which students are expected to analyse and respond to, guided by specific questions posed concerning the situation. In many cases, the scenario or case study involves a number of issues or problems that must be dealt with in a academic / professional workplace.
Why Case Study Questions are included in academics?
Case study assignments usually require students to identify problems and issues in a scenario, to demonstrate their developing knowledge of theories and academic / professional policies and to make decisions and recommendations based on these to either prevent or solve some of the issues in that scenario.
How to solve Case Study Questions?
There are several steps to writing an answer to a case study assignment:
STEP 1: Read the case study and questions carefully.
- Read the case and associated questions carefully.
- Highlight the main points of the case and any issues that you can identify.
- Read the questions closely and analyse what they are requiring you to do.
- Read the case again, linking the information that is relevant to each question you have been asked.
STEP 2: Identify the issues in the case study.
Case studies describe a situation which may arise in a particular profession or social context. They often involve a number of people in a complex situation. They will often describe a situation which is problematic, possibly in how it is dealt with, or in its complexity. An important part of your answer is to analyse the situation and to identify the issues/actions described in the case which may be problematic. The following questions may help you to do this:
- What actions were taken in the case?
- Were these actions the most appropriate and why?
- Were there any consequences of the actions taken?
- Was anything omitted or not considered?
- Were actions/procedures in line with existing codes of practice, policy or theories?
STEP 3: Link theory to practice.
Use your knowledge of existing codes of practice, theories and/or other academic / professional documents and behaviours to decide what was done appropriately and what was not.
STEP 4: Plan your answer.
It can be useful to use the questions you have been set as headings and to answer each part in turn, reducing the chance of omitting set questions. You can always take out the headings before you submit if you wish. Lecturers usually set questions in a logical order, so answer in the order they are written in your question.
STEP 5: Start writing your case study answer (for theory only)
Like any assignment, you will need an introduction, body sections in which you answer the questions put to you regarding the case study, and a conclusion.
STEP 6: Edit and proofread.
Read through your paper yourself to detect and correct other errors and omissions.
Check you have answered all questions and backed up your answer with relevant passage.
Types of Case Study Questions / Paragraph Based Questions
Case Study Questions / Paragraph Based Questions can be broadly classified into two types:
- MCQs type: In this type, student has to tick the correct option from various options.
- Theory type: In this type, student has to write proper solution / answer in cotext to the case study.
Case Study/ Passage Based Questions Chapter 3 Money and Credit
Type 1: MCQ type
Case Study Question 01
Read the extract given below and answer the questions that follow:
Besides banks, the other major source of cheap credit in rural areas are the cooperative societies (or cooperatives). Members of a cooperative pool their resources for cooperation in certain areas. There are several types of cooperatives possible such as farmers cooperatives, weavers’ cooperatives, industrial workers cooperatives, etc. Krishak Cooperative functions in a village not very far away from Sonpur. It has 2300 farmers as members. It accepts deposits from its members. With these deposits as collateral, the Cooperative has obtained a large loan from the bank. These funds are used to provide loans to members. Once these loans are repaid, another round of lending can take place. Krishak Cooperative provides loans for the purchase of agricultural implements, loans for cultivation and agricultural trade, fishery loans, loans for construction of houses and for a variety of other expenses.
Answer the following MCQs by choosing the most appropriate option:
Question.1. The passage given above relates to which of the following options?
(a) Loan condition in rural areas
(b) Loans from cooperatives
(c) Procedure to obtain loan
(d) Various sources of credits
Question.2. According to the given passage, Krishak cooperative is a good example of cooperative source of credit based on which of the following options?
(a) Provides cheap loan.
(b) Functions in village setup.
(c) Easy collateral.
(d) Its members are local farmers and they pool their funds.
Question.3. By providing loans to the small farmers, krishak Cooperative wants to:
(a) increase the income of the farmers.
(b) protect them from money-lenders.
(c) provide them cheap credit.
(d) All of the above
Question.4. In a rural setup, cooperative societies are highly effective mode of credit because:
(a) they have a large number of members.
(b) they do not need collateral.
(c) they provide loans at easy terms with low interest.
(d) they directly purchase agricultural equipments for farmers.
Ans.1. (b) Loans from cooperatives
Ans.2. (d) Its members are the local farmers and they pool their funds.
Ans.3. (d) All of the above
Ans.4. (c) they provide loans at easy terms with low interest.
Case Study Question 02
Read the extract given below and answer the questions that follow:
Grameen Bank of Bangladesh is one of the biggest success stories in reaching the poor to meet their credit needs at reasonable rates. Started in the 1970s as a small project, Grameen Bank in 2018 had over 9 million members in about 81,600 villages spread across Bangladesh. Almost all of the borrowers are women and belong to poorest sections of the society. These borrowers have proved that not only poor women are reliable borrowers, but that they can start and run a variety of small income-generating activities successfully.
Answer the following MCQs by choosing the most appropriate option:
Question.1. The passage given above relates to which of the following options?
(a) Self-help group
(b) Source of credit
(c) Loans for poor
(d) Grameen Bank of Bangladesh
Question.2. According to the given passage, Grameen Bank can be termed as a biggest success story based on which of the following options?
(a) It was started in 1970s.
(b) Its member increased to 9 million.
(c) The borrowers are poor women.
(d) All of the above
Question.3. By giving credit to poor women, Grameen Bank wants to:
(a) increase the standard of living.
(b) increase employment opportunities.
(c) empower poor women.
(d) All of the above
Question.4. What according to you is the reason that Grameen banks is so popular in Bangladesh?
(a) It provide loans only to women.
(b) It provides loan at very affordable rates.
(c) Help women to run a variety of small income-generating activities.
(d) All of the above
Ans.1. (d) Grameen Bank of Bangladesh
Ans.2. (d) All of the above
Ans.3. (c) empower poor women.
Ans.4. (b) It provides loan at very affordable rates.
Case Study Question 03
Read the extract given below and answer the questions that follow:
Cheap and affordable credit is crucial for the country’s development. The various types of loans or credits can be grouped as formal sector loans and informal sector loans. Among the former are loans from banks and cooperatives. The informal lenders include moneylenders, traders, employers, relatives and friends. Banks and cooperatives give loans on a lesser interest rate than the informal sector. But bank loans require proper documents and collateral. Absence of collateral is one of the major reasons why bank loans are not available to small farmers and people who wish to start small industries.
Compared to the formal lenders, most of the informal lenders charge a much higher interest on loans. Thus, the cost to the borrower of informal loans is much higher. Higher cost of borrowing means a larger part of the earnings of the borrowers is used to repay the loan. For these reasons, banks and cooperative societies need to lend more to the poorer section of people. This would lead to higher incomes and many people could then borrow cheaply for a variety of needs. They could grow crops, do business, set up small-scale industries etc. They could set up new industries or trade in goods.
Question.1. Identify the types of loans or credits can be grouped into:
(a) Formal sector
(b) Informal sector
(c) Both (a) and (b)
(d) Only (a)
Question.2. What is the main reason that bank loans are not available to small farmers?
(a) Lack of proper documents
(b) Absence of collateral
(c) Both (a) and (b)
(d) None of the above
Question.3. Which of the following is not a part of informal source of lenders?
(a) RBI
(b) Commercial banks
(c) Moneylenders living in rural areas
(d) Both (a) and (b)
Question.4. Which one of the following statements is true regarding loans provided by formal and informal sector?
(a) Formal lenders charge a much higher interest on loans than informal lenders.
(b) Informal lenders charge a much higher interest on loans than formal lenders.
(c) Cost to the borrower of informal loans is much lower than formal loans.
(d) Both (b) and (c)
Ans.1. (c) Both (a) and (b)
Ans.2. (b) Absence of collateral
Ans.3. (d) Both (a) and (b)
Ans.4. (b) Informal lenders charge a much higher interest on loans than formal lenders.
Case Study Question 04
Read the extract given below and answer the questions that follow:
Credit is one of the major aspects that determine a country’s development. There is a huge demand for loans for various economic activities. Cheap and affordable loans give people an opportunity to develop their business. Credit plays a very crucial role in agricultural activities. People can borrow money and use it to adopt modern farming methods to increase the crop production and grow crops which are more reliable than the traditional methods. By sanctioning loans to developing industries and trade, banks provide them with the necessary aid for improvement. This leads to increased production, employment and profits that ultimately help in the development of the country.
Question.1. What is the main aspect that determines the country’s development?
(a) Economic activities
(b) Agricultural activities
(c) Credit
(d) None of the above
Question.2. Which one of the following is not included in the terms of credit?
(a) Rate of interest
(b) Mode of payment
(c) Rate of saving
(d) Collateral
Question.3. ‘Cheap and affordable loans give people an opportunity to develop their business’. Identify whether this statement is true or false.
(a) False
(b) True
(c) Inadequate information
(d) None of the above
Question.4. Fill up the blank:
People can borrow money and use it to adopt __________ farming methods to increase the crop production and grow crops.
(a) modern
(b) traditional
(c) advanced
(d) None of these
Question.5. Two statements are given in the question below as Assertion and Reasoning. Read the statements and choose the appropriate option.
Assertion (A) : Bank loans leads to increased production, employment and profits that ultimately help in the development of the country.
Reason (R): Credit plays a very crucial role in procurement activities.
Options:
(a) Both (A) and (R) are true but (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 and (R) is false.
(d) (A) is false but (R) is true.
Ans.1. (c) Credit
Ans.2. (c) Rate of saving
Ans.3. (b) True
Ans.4. (a) modern
Ans.5. (c) (A) is true and (R) is false
Type 2: Theory Type
Case Study Question 05
Read the extract and answer the questions that follow:
There is an interesting mechanism at work here. Banks keep only a small proportion of their deposits as cash with themselves. For example, banks in India these days hold about 15 per cent of their deposits as cash. This is kept as provision to pay the depositors who might come to withdraw money from the bank on any given day. Since, on any particular day, only some of its many depositors come to withdraw cash, the bank is able to manage with this cash.
Banks use the major portion of the deposits to extend loans. There is a huge demand for loans for various economic activities. We shall read more about this in the following sections. Banks make use of the deposits to meet the loan requirements of the people. In this way, banks mediate between those who have surplus funds (the depositors) and those who are in need of these funds (the borrowers). Banks charge a higher interest rate on loans than what they offer on deposits. The difference between what is charged from borrowers and what is paid to depositors is their main source of income. A large number of transactions in our day to-day activities involve credit in some form or the other. Credit (loan) refers to an agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment.
Question.1. What do you understand by the term credit?
Question.2. Who will mediate between those who have surplus funds (the depositors) and those who are in need of these funds (the borrowers)?
Question.3. What does bank do with the deposits of public?
Question.4. How Banks help small businesses?
Ans.1. Credit (loan) refers to an agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment.
Ans.2. Bank will mediate between those who have surplus funds (the depositors) and those who are in need of these funds (the borrowers).
Ans.3. Banks make use of the deposits to meet the loan requirements of the people.
Ans.4. Banks provide financial and advisory services to small and medium businesses, these services are tailored to the specific needs of each business.
Case Study Question 06
Read the sources given below and answer the questions that follow:
Source A- Borrowers and lenders
Every loan agreement specifies an interest rate which the borrower must pay to the lender along with the repayment of the principal. In addition, lenders may demand collateral (security) against loans. Collateral is an asset that the borrower owns (such as land, building, vehicle, livestock, deposits with banks) and uses this as a guarantee to a lender until the loan is repaid.
Source B- Formal sector in India
The various types of loans can be conveniently grouped as formal sector loans and informal sector loans. Among the former are loans from banks and cooperatives. The informal lenders include moneylenders, traders, employers, relatives and friends, etc. The Reserve Bank of India supervises the functioning of formal sources of loans. For instance, we have seen that the banks maintain a minimum cash balance out of the deposits they receive. The RBI monitors the banks in actually maintaining cash balance.
Source C- Loan activities of banks
Banks keep only a small proportion of their deposits as cash with themselves. For example, banks in India these days hold about 15 per cent of their deposits as cash. This is kept as provision to pay the depositors who might come to withdraw money from the bank on any given day. Since, on any particular day, only some of its many depositors come to withdraw cash, the bank is able to manage with this cash.
Source A- Borrowers and lenders
Question.1. What do you mean by collateral in banking system?
Source B- Formal sector in India
Question.2. Who supervises the functioning of formal sources of loans?
Source C- Loan activities of banks
Question.3. What per cent of deposits is used as cash by banks?
Ans.1. Collateral is an asset that the borrower owns (such as land, building, vehicle, livestocks, deposit with banks) and uses this to provide guarantee to lender until the loan is repaid.
Ans.2. The Reserve Bank of India supervises the functioning of formal sources of loans.
Ans.3. Banks in India, these days, hold about 15 per cent of their deposits as cash.
Case Study Question 07
Read the sources given below and answer the questions that follows:
Source A- Medium of exchange
In an economy where money is in use, money by providing the crucial intermediate step eliminates the need for double coincidence of wants. It is no longer necessary for the shoe manufacturer to look for a farmer who will buy his shoes and at the same time sell him wheat. All he has to do is find a buyer for his shoes. Once he has exchanged his shoes for money, he can purchase wheat or any other commodity in the market. Since money acts as an intermediate in the exchange process, it is called a medium of exchange.
Source B- Issuing of currency
As per the Indian law, no other individual or organisation is allowed to issue currency. Moreover, the law legalises the use of rupee as a medium of payment that cannot be refused in settling transactions in India. No individual in India can legally refuse a payment made in rupees. Hence, the rupee is widely accepted as a medium of exchange.
Source C- Credit arrangement
Interest rate, collateral and documentation requirement, and the mode of repayment together comprise what is called the terms of credit. The terms of credit vary substantially from one credit arrangement to another. They may vary depending on the nature of the lender and the borrower. The next section will provide examples of the varying terms of credit in different credit arrangements.
Source A- Medium of exchange
Question.1. Why money acts as an intermediary in the exchange process?
Source B- Issuing of currency
Question.2. Do any individual or organisation is allowed to issue currency in India?
Source C- Credit arrangement
Question.3. What are terms of credit?
Ans.1. Money acts as an intermediate in the exchange process because it is considered as a medium of exchange.
Ans.2. As per the Indian law, no other individual or organisation is allowed to issue currency. Moreover, the law legalises the use of rupee as a medium of payment that cannot be refused in settling transactions in India.
Ans.3. The interest rate, collateral and documentation requirement, and the mode of repayment together comprise terms of credit.
Case Study Question 08
Read the sources given below and answer the questions that follows:
Rahul wants to sell sugar and buy wheat. He has to look for a person who wants sugar and has wheat to sell. In contrast, if in an economy, where money is used, Rahul who wants to sell sugar only has to look for a buyer for his sugar. The money which he will get can be used to purchase the wheat or any other commodity in the market. Since money is used in the exchange process, identify the function of money discussed here.
(a) Store of value
(b) Standard of deferred payment
(c) Medium of exchange
(d) Double coincidence of wants
Ans. (c) Medium of exchange
Case Study Question 09
Read the sources given below and answer the questions that follows:
Anupam takes a loan of ₹ 5 lakh from a bank for his production needs. He utilises the money efficiently, makes a profit, and repays the loan with interest on time as per the credit terms. Identify the role of credit here.
(a) Negative role, by helping him to increase his income.
(b) Positive role, by helping him to increase his income.
(c) Negative role, by helping him to create liability on him.
(d) None of the above
Ans. (b) Positive role, by helping him to increase his income.
Case Study Question 10
Read the sources given below and answer the questions that follows:
Prakash is a small farmer and grows groundnuts in his three acres of land. He takes a loan from the moneylender to meet the expenses of cultivation, hoping that his harvest would help repay the loan. But the failure of crops makes loan repayment impossible. He has to sell a portion of his land to repay the loan. Credit, instead of helping Prakash improve his earnings, leaves him worse off.
Identify the situation in which Prakash falls into.
(a) Debt trap
(b) Insolvent
(c) Bankrupt
(d) None of these
Ans. (a) Debt trap
