Unleash Your Understanding of Demonetization in India
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Questions and Answers

What is the legal basis for demonetization in India?

  • Section 26(3) of the Reserve Bank of India Act, 1934
  • Section 26(4) of the Reserve Bank of India Act, 1934
  • Section 26(2) of the Reserve Bank of India Act, 1934 (correct)
  • Section 26(1) of the Reserve Bank of India Act, 1934

What is the test of proportionality referred to in the text?

  • Whether the benefits of demonetization are equal to the costs
  • Whether demonetization is necessary
  • Whether the benefits of demonetization outweigh the costs (correct)
  • Whether the costs of demonetization outweigh the benefits

What is one of the disadvantages mentioned in the text regarding demonetization?

  • Stabilization of Currency
  • Increase in tax base
  • Promotion of Digitization
  • Temporary Slowdown (correct)

Why did the RBI withdraw the 2000 rupee notes?

<p>To meet immediate currency requirements after demonetization (D)</p> Signup and view all the answers

What is the exchange limit for Rs 2000 banknotes?

<p>Rs 20,000 at a time (B)</p> Signup and view all the answers

What does the RBI's Clean Note Policy focus on?

<p>Providing high-quality currency notes and coins (D)</p> Signup and view all the answers

What was the impact of the withdrawal of 2000 rupee notes on the economy, according to the RBI governor?

<p>Boost in bank deposits and reduction in interest rates (B)</p> Signup and view all the answers

What is demonetization?

<p>The act of stripping a currency unit of its status as legal tender (D)</p> Signup and view all the answers

What is the legal basis for demonetization in India?

<p>Section 26(2) of the Reserve Bank of India Act, 1934 (B)</p> Signup and view all the answers

According to the Supreme Court, what is the test of proportionality in the context of demonetization?

<p>The test of whether the benefits of demonetization are significant enough to justify the costs (C)</p> Signup and view all the answers

What were some advantages of demonetization mentioned in the text?

<p>All of the above (D)</p> Signup and view all the answers

What were some disadvantages of demonetization mentioned in the text?

<p>All of the above (D)</p> Signup and view all the answers

What was the RBI's announcement regarding the Rs 2000 denomination banknotes?

<p>The existing notes will remain legal tender (D)</p> Signup and view all the answers

What is the deadline for individuals to deposit or exchange the Rs 2000 denomination banknotes?

<p>September 30, 2023 (C)</p> Signup and view all the answers

What is the potential impact of demonetization on small businesses operating on thin profit margins?

<p>All of the above (D)</p> Signup and view all the answers

What did the Supreme Court state about the demonetization of Rs 500 and Rs 1000 currency notes?

<p>It was valid (B)</p> Signup and view all the answers

What did the Supreme Court say about the benefits of demonetization?

<p>They were significant enough to justify the costs (B)</p> Signup and view all the answers

Why were the Rs 2000 banknotes introduced in 2016?

<p>To meet the immediate currency requirements after the withdrawal of Rs 500 and Rs 1000 notes (D)</p> Signup and view all the answers

What is the current value of Rs 2000 banknotes in circulation as of March 31, 2023?

<p>Rs 3.62 lakh crore (D)</p> Signup and view all the answers

What is the definition of a 'soiled note' according to RBI's Clean Note Policy?

<p>A note which has become dirty due to normal wear and tear (C)</p> Signup and view all the answers

Why did the RBI withdraw all banknotes issued before 2005?

<p>Due to their fewer security features as compared to banknotes printed after 2005 (A)</p> Signup and view all the answers

What was the main objective of introducing Rs 2000 banknotes in 2016?

<p>To meet the immediate currency requirements after the withdrawal of Rs 500 and Rs 1000 notes (A)</p> Signup and view all the answers

What is the exchange limit for Rs 2000 banknotes?

<p>Rs 20,000 at a time (A)</p> Signup and view all the answers

What is the impact of the withdrawal of 2000 rupee notes on the economy, according to the RBI governor?

<p>Very very marginal (A)</p> Signup and view all the answers

What was the purpose of the demonetization exercise in November 2016?

<p>To curb black money and corruption (B)</p> Signup and view all the answers

What is the current percentage of Rs 2000 banknotes in circulation compared to the total notes in circulation?

<p>10.8% (C)</p> Signup and view all the answers

What is the main objective of RBI's Clean Note Policy?

<p>To provide the public with high-quality currency notes and coins with improved security features (A)</p> Signup and view all the answers

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