BUSINESS ADMINISTRATION
BUSINESS ENVIRONMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Social environment
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Political environment
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Economic environment
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None of the above
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Detailed explanation-1: -The demonetisation move resulted in the reduction of GDP growth, increase in inflation, job losses and a decline in consumer spending.
Detailed explanation-2: -While the growth rate was partially higher in the following quarter or two due to low base effects, quarterly real GDP growth fell from the 9 per cent levels seen in FY17 and FY18 to 3 per cent in the last quarter of FY20. MSMEs bore the biggest brunt of demonetisation.
Detailed explanation-3: -Owing to a substantial withdrawal of currency in circulation, demonetisation led to a check on food inflation in the economy. Liquidity crunch led to a substantial fall in stock piling of foodgrains. Accordingly, there was a sharp fall in food inflation by about 240 basic points between November 2016-January 2017.
Detailed explanation-4: -Interest rates: Cash transactions declined, Bank deposits increased and Increase in financial savings. Private wealth: Declined since some high demonetized notes were not returned. Real estate: Decline in prices of property.
Detailed explanation-5: -As there is less liquidity and currency movement into the economy as a result of demonetization, inflation declines. The monetary supply will decline to some extent as black or illegal money flushes.