| Consider the following statements |
| 1. Inflation benefits the debtors. |
| 2. Inflation benefits the bond-holders, |
| Which of the statements given above is/are correct? |
A) Only 1
B) Only 2
C) Both 1 and 2
D) neither 1 nor 2
Correct Answer: A
Solution :
Inflation redistributes wealth from creditors to debtors i.e. lenders suffer and borrowers benefit out of inflation. Bond holders are persons who had lend money (to debtor) and received bond in return. So he is lender, he suffers.
You need to login to perform this action.
You will be redirected in
3 sec
