Question

discuss the immpact of demonetization on the indian economy​

Answer 1

Answer:

ok

Explanation:

Withdrawal of highest currency notes reduces the growth rate of the economy. Demonetisation reduces consumption pattern, income, investment etc. This may bring a slowdown in India's growth rate as the liquidity crisis itself may last three-four months.

hope it helps

Answer 2

Answer:

Demonetization is not a big disaster like global banking sector crisis of 2007; but at the same time, it will act as a liquidity shock that disturbs economic activities.

Liquidity crunch (short term effect): liquidity shock means people are not able to get sufficient volume of popular denomination especially Rs 500.

Consumption will be hit: When liquidity shortage strikes, it is consumption that is going to be adversely affected first.