Multiple choice

By which of the following will the value of rupee not decrease?

  1. Decreasing the tax rates

  2. Evasion of taxes by majority of population

  3. Prohibiting the issue of new currency notes

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

It will increase the value of money. When new currency notes are not issued by the government, it will not put extra purchasing power in the hands of people. The quantity demanded by people will also not increase. Hence, the prices will remain stable. Thus, the value of rupee will not decrease.

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