Q. Consider the following statements with reference to “Demonetization”:
1.It leads to growth in the direct tax base.
2.It is used as a tool to stabilize the currency and fight inflation.
3.It improves the economic growth of a nation.
Which of the statements given above are correct?

[A] 1 and 2 only

[B] 2 and 3 only

[C] 1 and 3 only

[D] 1, 2 and 3

Answer: A
Notes:

Explanation –

Statement 1 and 2 are correct. Demonetization leads to growth in the direct tax base. It is used as a tool to stabilize the currency and fight inflation.

Statement 3 is incorrect. Demonetization leads to decline in the economic growth of the nation.

Source: ForumIAS