Question

Why is there a proposal to stop printing the 100$ bill (think about the video we watched on the pot business as it related to banking):

a) it skews the money supply

b) larger bills lose value faster than small bills

c) it is harder to spend than smaller denominations

d) it would make the actual physical transportation of high-volume cash transaction more difficult for bad guys

Answer 1

Answer

Option D) is correct. It would make the actual physical transportation of high-volume cash transaction more difficult for bad guys

Reason:

$100 bill is a huge sum of money captured in a single bill. It makes it easier to have big transactions and pay for them just by giving a few of such $100 bills. However, it becomes extremely cumbersome to pay via smaller denomination bills for a big transaction. Thus, usually bad people/ people with black money try to deal with physical currency and it is easier for them to pay in big denomination bills like $100 bills.

Thus, if the printing of such huge denomination bills is stopped, it would force the bad guys also to use more of online transactions instead of physical money as physical money will be difficut to carry for a high- volume cash transaction.