Foundation
General Knowledge
Indian Economy
Indian Economy
Indian Economy
Question
Consider the following statements:
1. Inflation benefits debtors.
2. Inflation benefits the bond-holders.
Which of the statements given above are correct?
1. Inflation benefits debtors.
2. Inflation benefits the bond-holders.
Which of the statements given above are correct?
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Solution
Inflation brings benefit to borrowers (debtors) while the profit on the bonds gets eroded (higher the inflation lower the return on bonds through interest).