Consider the following statements:

  1. Inflation benefits the debtors.
  2. Inflation benefits the bondholders.

Which of the statements given above is/are correct?

[UPSC Civil Services Exam – 2013 Prelims]

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2


Answer: (a)        

Explanation:

  • Inflation redistributes wealth from creditors to debtors i.e.lenders suffer and borrowers benefit out of inflation.
    • Bondholders have lent money (to debtor) and received a bond in return.
    • So he is a lender, he suffers (Debtor benefits from inflation).
    • Hence statement 1 is correct.
  • Statement 2 has not used specifically the word “inflation-indexed bonds”, hence we cannot say Inflation benefits the bond-holders.
    • ​Hence statement 2 is incorrect.

Consider the following statements:                                                                   The Parliament of India can place a particular law in the Ninth Schedule of the Constitution of India. The validity of a law placed in the Ninth Schedule cannot be examined by any court and no judgement can be made on it. Which of the statements given above is/are correct?

Consider the following statements:                                               

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Consider the following statements:                                                         The Parliament of India can place a particular law in the Ninth Schedule of the Constitution of India. The validity of a law placed in the Ninth Schedule cannot be examined by any court and no judgement can be made on it. Which of the statements given above is/are correct?

Consider the following statements:                                               

Read More »

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