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    Question

    Assertion (A): Demonetization in 2016 significantly

    increased India’s GDP growth rate. Reason (R): Demonetization led to the formalization of the economy and improved tax compliance.
    A Both A and R are true, and R is the correct explanation of A. Correct Answer Incorrect Answer
    B Both A and R are true, but R is not the correct explanation of A. Correct Answer Incorrect Answer
    C A is false, but R is true. Correct Answer Incorrect Answer
    D A is true, but R is false. Correct Answer Incorrect Answer

    Solution

    Demonetization caused a temporary decline in GDP growth due to cash shortages, but it did promote formalization and better tax compliance. Hence, the assertion is false, but the reason is true.

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