Introduction:
Demonetization refers to the process of stripping a currency unit of its status as legal tender. In the case of India, demonetization occurred on November 8, 2016, when the government invalidated the 500 and 1,000 rupee notes in circulation. This move aimed to curb black money, counterfeit currency, and corruption in the country. The impact of demonetization on the PPC (Production Possibility Curve) can be analyzed from various perspectives.

Effect on Consumption and Investment:
1. Decreased Consumption: Demonetization led to a temporary shortage of cash in the economy, causing a decline in consumer spending. As a result, the demand for goods and services decreased, leading to a downward shift in the PPC curve.

2. Reduced Investment: The sudden withdrawal of high-value currency notes affected business transactions and disrupted economic activities. It resulted in a decline in investment due to uncertainty and reduced confidence among businesses. This reduction in investment further contributed to a downward shift in the PPC curve.

Effect on Employment and Production:
1. Job Losses: Due to the decline in consumption and investment, businesses faced financial constraints, leading to job losses in various sectors. This resulted in an increase in unemployment, which impacted the overall production capacity of the economy.

2. Disruption in Production: Demonetization disrupted the supply chain and production process, especially for small and informal sectors that heavily relied on cash transactions. The reduced availability of cash hampered production activities and caused a temporary decline in the economy's productive capacity.

Effect on Government Revenue and Expenditure:
1. Increased Tax Compliance: Demonetization aimed to bring unaccounted wealth into the formal economy. As a result, there was an increase in tax compliance, leading to higher government revenue in the long run. This increased revenue can positively impact the PPC curve by providing the government with more resources for investment and infrastructure development.

2. Increased Government Expenditure: The government had to incur expenses to implement demonetization, including printing new currency notes, promoting digital payments, and managing the transition. This increased expenditure might have a slight negative impact on the PPC curve in the short term.

Effect on Informal Sector and Financial Inclusion:
1. Formalization of Informal Sector: Demonetization aimed to formalize the informal sector by promoting digital transactions and reducing cash-based activities. This could lead to better documentation, increased transparency, and improved productivity in the long run.

2. Financial Inclusion: The push towards digital payments and the use of banking services increased financial inclusion. This could potentially lead to a higher savings rate, increased investment, and overall economic growth, positively impacting the PPC curve.

Conclusion:
Demonetization had both short-term and long-term effects on the PPC curve. In the short term, the disruption caused a downward shift due to reduced consumption, investment, and production. However, in the long run, the formalization of the informal sector, increased tax compliance, and financial inclusion initiatives could positively impact the PPC curve by enhancing productivity and economic growth.