Liquid
Most liquid form of money
Cash
What institution issues India's currency notes?
The Reserve Bank of India, except for the ₹1 note, which is issued by the Government of India.
What does UPI stand for?
Unified Payments Interface.
Is all cash black money?
Sometime maybe yes, sometime maybe no. xD
What is tax evasion?
Illegally avoiding taxes by concealing income, falsifying information or otherwise violating tax laws.
What makes an asset liquid
Can be converted into means of payment with little loss of value
What is India's official currency?
The Indian Rupee (₹).
What can you use a QR code to do in a UPI payment?
Scan it to initiate a digital payment from a linked bank account.
When can legitimately earned money become a tax problem?
When taxable income is deliberately concealed or improperly reported.
What is the purpose of GST?
It is a comprehensive indirect tax on the supply of goods and services in India.
Which is more liquid: ₹1 lakh in a savings account or ₹1 lakh worth of land?
Money in a savings account.
What is the difference between money and wealth?
Money is used as a medium of exchange and for payments; wealth includes the total value of assets owned.
Give one advantage of digital payments over cash.
They create an electronic transaction record and can be transferred quickly.
Can black money exist without being physical cash?
Yes. It can involve concealed income or assets connected with businesses, property, investments or other arrangements.
What was demonetisation in India associated with in 2016?
The withdrawal of the legal-tender status of the old ₹500 and ₹1,000 notes, with objectives including addressing unaccounted cash and counterfeit currency.
Name two forms of highly liquid money other than physical cash.
Demand deposits/bank-account balances and readily accessible digital payment balances.
Why does cash remain important in India despite rapid digitalisation?
It is convenient, widely accepted and important for many small businesses and parts of the informal economy.
Does using UPI automatically mean a transaction is legal and tax-compliant?
No. Digital payment records improve traceability, but legality and tax compliance depend on the underlying transaction and reporting.
Why is cash sometimes associated with unaccounted transactions?
Cash transactions can, in some circumstances, be harder to trace if they are deliberately kept outside formal records.
Why can digital transaction records help tax authorities?
They can provide records that help establish transaction flows and improve financial traceability.
Why is liquidity important to an economy?
It allows households and businesses to make payments and conduct transactions quickly.
Give one reason why an economy needs both liquid money and less-liquid assets.
Liquid money supports everyday transactions, while less-liquid assets such as property can store wealth and support long-term investment.
Name one disadvantage of depending entirely on digital payments.
Cyber fraud, technical failures, lack of connectivity or limited digital literacy can create problems.
True or false: Eliminating cash would completely eliminate black money.
False. Black money is fundamentally about concealed or improperly accounted-for income or transactions, not simply the physical form of money.
What is the main difference between tax avoidance and tax evasion?
Tax avoidance generally involves arranging affairs within the law to reduce tax, while tax evasion involves illegally concealing or misrepresenting information to avoid tax.