Use app×
Join Bloom Tuition
One on One Online Tuition
JEE MAIN 2025 Foundation Course
NEET 2025 Foundation Course
CLASS 12 FOUNDATION COURSE
CLASS 10 FOUNDATION COURSE
CLASS 9 FOUNDATION COURSE
CLASS 8 FOUNDATION COURSE
0 votes
4.3k views
in Economics by (77.6k points)

“Whether credit would be useful or wet, it depends on the situations”. Give two different examples in support of this statement.

1 Answer

+1 vote
by (73.6k points)
selected by
 
Best answer

We can give examples of Salim and Swapna in support of this statement. 

(i) Salim is a shoe manufacturer. He obtains credit to meet the working capital needs of production. The credit helps him to meet the ongoing expenses of production, complete production on time and thereby increase his earnings. Credit, plays a vital and positive role in this situation.

(ii) Swapna is a small farmer and grows groundnuts in her three acres of land. She takes a loan from the moneylender to meet the expenses of cultivation, hoping that her harvest would help repay the loan. But the failure of crops makes loan repayment impossible. She has to sell a portion of her land to repay the loan. Credit, instead of helping Swapna improve her earnings, leaves her worse off. She falls into a debt trap.

Welcome to Sarthaks eConnect: A unique platform where students can interact with teachers/experts/students to get solutions to their queries. Students (upto class 10+2) preparing for All Government Exams, CBSE Board Exam, ICSE Board Exam, State Board Exam, JEE (Mains+Advance) and NEET can ask questions from any subject and get quick answers by subject teachers/ experts/mentors/students.

Categories

...