Question

The existence of Parallel economy/black money ____________.

• A. makes the economy more competitive
• B. makes the monetary policies less effective
• C. ensure a better distribution of income and wealth
• D. ensure increasing productive investment

Answer 1

The correct option is B makes the monetary policies less effective

Black money is a socioeconomic evil. The existence of rapidly growing black money in our economy has grave and disastrous consequences. The existence Black money lead to the creation of a parallel economy. It also makes the monetary policies less effective as the government cannot account properly account for the money which is not formally included in the system.