Question

QRead the information given below and select the correct option.
Mohan is an agricultural labourer. There are several months in a year when he has no work

and needs credit to meet his daily expenses. He depends upon his employer, the landowner for
credit who charges an interest rate of 5 per cent per month. Mohan repays the money by

working physically for the landowner on his farmland.

Over the years his debt will –

A. Increase - because of increasing interest and non-payment of monthly amount

B. Remain constant - as he is working for the employer but is repaying less

C. Reduce - as amount equivalent to his salary is being counted as monthly repayment

D. Be totally repaid - as he is repaying the debt in the form of physical labour

OR

Must of the agricultural labourers like Mohan depend upon loans from informal

sector. Which of the following statements about this sector is correct –

A. There are govt. bodies to supervise informal sector

B. Money lenders ask for a reasonable rate of interest

C. Cost of informal loans to the borrower is quite high

D. Money lenders use fair means to get their money back​

Answer 1

Answer:

a. the answer is b. money lenders ask for a resonable rate of interest