Analytically what does demonetisation comprise of? - Vidyadip

Question

Analytically what does demonetisation comprise of?

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Answer

Analytically demonetisation comprises of:

A contraction of money supply, but only one type of money, i.e, cash.
A tax on unaccounted private wealth maintained in the form of cash, i.e., black money.
A tax on savings outside the formal financial system.

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