Social Science (087) — AI-generated practice question

Credit can be a boon when it helps borrowers increase their earnings. For example, Salim, a shoe manufacturer, took a loan to buy raw materials and hire workers to fulfil a large order. He completed production on time, earned good profit, and repaid the loan. Here, credit played a positive role.

Credit becomes a bane when risks are high. Swapna, a small farmer, borrowed from a moneylender for cultivation. Her crop failed due to pests, making repayment impossible. Debt grew, and she had to sell part of her land — falling into a debt trap.

Thus, whether credit is useful depends on the risks involved and available support in case of loss.

Source: Chapter 3, Two Different Credit Situations

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• The examiner expects two clearly contrasting situations — one positive (Salim) and one negative (Swapna) — directly from the textbook examples.
• Name the examples and briefly explain why credit helped or harmed — don't just say "good" or "bad."
• Key terms to use: boon, bane, debt trap, risk — these fetch marks.
• End with the textbook's own conclusion: outcome depends on risk and support in case of loss.