Practicing Success

Target Exam

CUET

Subject

Business Studies

Chapter

Business Environment

Question:

What is a potential disadvantage of digital transactions?

Options:

Increased tax compliance

Channelizing savings into formal financial systems

Encouraging financial savings

Dependence on internet connectivity

Correct Answer:

Dependence on internet connectivity

Explanation:

Demonetisation is to create a less-cash or cash-lite economy, i.e., channeling more savings through the formal financial system and improving tax compliance. Though there are arguments against this as digital transactions require use of cell phones for customers and Point-of-Sale (PoS) machines for merchants, which will only work if there is internet connectivity.