Social Science (087) — AI-generated practice question

Salim, a shoe manufacturer, received an order for 3,000 pairs of shoes before the festival season. To complete production on time, he needed money to hire workers and buy raw materials. He obtained credit by getting leather from the supplier on credit and taking an advance loan from the trader.

This credit helped Salim meet his working capital needs — ongoing expenses of production. He completed the order on time, earned a good profit, and repaid the loan. Thus, credit played a positive role by enabling Salim to increase his earnings, which would not have been possible without timely credit.

Source: Chapter 3 – Money and Credit, "Two Different Credit Situations – Festival Season"

---

• Examiners look for three elements: the situation/need for credit, how credit was obtained, and the positive outcome (increased earnings + repayment).
• Mention "working capital needs" — it's the textbook term and fetches a mark.
• Avoid confusing this with Swapna's example (negative credit). Stay focused on Salim only.
• 3 marks = ~3 distinct points, so structure your answer around need → credit obtained → positive outcome.