Question : On 8th november 2016, with the announcement from Government of India, all the Rs 500 and Rs 1000 bank notes have ceased to be a legal tender. The government also announced the issuance of new Rs 500 and Rs 2000 banknotes in exchange for the demonetised bank notes. Identify the concept being described in the above lines.
Option 1: Globalisation
Option 2: Liberalisation
Option 3: Demonetisation
Option 4: Privatisation
Correct Answer: Demonetisation
Solution :
The 500 and 1000 denomination notes were removed from circulation on November 8, 2016. As a result, 86 percent of the currency in circulation was withdrawn. People were advised to go to the bank and exchange old notes for new ones up to a certain limit. There was a limit on cash withdrawals. The primary goal of demonitisation was to reduce corruption. In the above case, Demonitisation concept is discussed.
Hence, option 3 is the correct answer.
