Question

On 8 November 2016, the Government of India announced the demonetisation of all ₹500 and ₹1,000 banknotes of the Mahatma Gandhi Series. Because of this step taken by the GOVERNMENT people deposited the old currency into their bank account resulting a decline in money supply into the economy. Defend or refute with reason.

Answer 1

On November 8, 2016, the Prime Minister of India, Narendra Modi, announced the “notebandi” initiative, declaring that the use of all Rupees (Rs.) 500 and Rs. 1,000 banknotes (equal to about US$7.60 and US$15.30) of the Mahatma Gandhi Series would cease to be legal tender past midnight that night.