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“Black money one of the reasons for (causes of) price rise? Explain. |
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Answer» Black money is unaccounted money. Many economic transactions are not mentioned in the books of account to evade taxation. Excess income is hidden in the form of black money. Black money constitutes parallel economy in India, whereby such persons invest in land and real estate; or they lend money to those who indulge in unfair trades like smuggling and speculative trade. They are afraid being caught and therefore prefer to spend money on luxurious lifestyles. They store their money outside the country in foreign banks. In this way, black money is a contributing factor to the price rise. |
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