Post on 25-Jan-2017
How this ban of Rs.500 and Rs.1000 old notes affect the common man…
WHAT HAPPENED NEXT ????
• People who have a lot of cash, legally earned,
will increase bank’s deposits by a huge margin.
• This will also increase the lending activity
because banks have a CRR (cash reserve ratio)
to maintain and with more deposits they can
do more lending.
• People who have illegally earned this money may be
afraid to deposit it in a bank. There are people with
crores of cash, black money, earned through illegal
ways, such as corruption, smuggling etc. And if they
deposit this money in a bank then question will be put
on them that “how did they make this in first place”.
• This will reduce the total currency circulation in the
economy - leading to deflation.
• Deflation increases the value of money that
we have because the total money supply
goes down but the commodities and things
available in the market have not gone down.
• Real Estate would crash slowly and recover
quickly.
• In the end we just want to say that path is truly risky but it will surely help everyone or beneficial over a period of time.
• We just hope the exchange process should be easy so that it will npt affect the common man.
Thankyou
DMCHALLENGER.COM