Question

In economics demonetization has brought many changes in the indian economy comment this statement

Answer 1

Answer:

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Answer 2

It brought about both positive and negative changes.

• The effect on Indian economy was -

1. It had an impact on purchasing power. Assets that are utilised as long-term investments, like vehicles property cement and steel core sectors were affected.
2. The stock values in these industries suffered as a result. Because of the country's cash crisis, currency circulation had decreased, lowering GDP by reducing consumer demand.
3. However, the projected impact on GDP was unconsiderable as part of this demand was merely be postponed and re-entered once the cash situation returned to normal.
4. Banks had both positive and critical impacts. People were required to deposit money to increase their short-term liquidity, as directed by the government. This cash was subsequently used to long-term lending purposes.
5. Because banks receive money at Repo Rate and lend money at Base Rate, lending rates decreased. Repo Rates had fallen, causing base rates to fall as well.