Get Started
Start Free Mocks
CUETMOCK

Ace Your

CUET Preparation Today

Start Free Mocks
Home Questions ZWVXHE2VMS
Target Exam

CUET

Subject

Economics

Chapter

Indian Economic Development: Liberalisation, Privatisation and Globalisation - An Appraisal

Question:

On November 8, 2016, the government announced a historic measure, with profound implications for the economy i.e Demonetisation. Which of the following option depicts a clear definition of the term Demonetisation?

Options:

Putting an official stop on the status of a currency as a legal tender

Putting an intrinsic value to a commodity

Giving new currency to the citizens of a country

Both 1 and 3

Correct Answer:

Putting an official stop on the status of a currency as a legal tender

Explanation:

The correct answer is option 1: Putting an official stop on the status of a currency as a legal tender

Demonetization refers to the act of withdrawing legal tender status from a currency unit. In simpler terms, it means that the government declares certain banknotes as no longer valid for making payments.

Here's how the other options relate to demonetization:

  • Putting an intrinsic value to a commodity: This refers to assigning a value to a physical good based on its inherent worth. While demonetization can affect the value of a currency, it doesn't involve assigning intrinsic value to a commodity.
  • Giving new currency to the citizens of a country: This is often done as part of a demonetization process to replace the old, invalid currency with new notes. However, it's not the defining characteristic of demonetization itself.

CUET Questions