{"id":91110,"date":"2025-06-01T10:47:04","date_gmt":"2025-06-01T10:47:04","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=91110"},"modified":"2025-06-01T10:47:04","modified_gmt":"2025-06-01T10:47:04","slug":"consider-the-following-statements-1-inflation-benefits-the-debtors","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-1-inflation-benefits-the-debtors\/","title":{"rendered":"Consider the following statements:\n  1. Inflation benefits the debtors"},"content":{"rendered":"<p>Consider the following statements:<\/p>\n<ul>\n<li>1. Inflation benefits the debtors.<\/li>\n<li>2. Inflation benefits the bond-holders.<\/li>\n<\/ul>\n<p>Which of the statements given above is\/are correct?<\/p>\n<p>[amp_mcq option1=&#8221;1 only&#8221; option2=&#8221;2 only&#8221; option3=&#8221;Both 1 and 2&#8243; option4=&#8221;Neither 1 nor 2&#8243; correct=&#8221;option1&#8243;]<\/p>\n<div class=\"psc-box-pyq-exam-year-detail\">\n<div class=\"pyq-exam\">\n<div class=\"psc-heading\">This question was previously asked in<\/div>\n<div class=\"psc-title line-ellipsis\">UPSC IAS &#8211; 2013<\/div>\n<\/div>\n<div class=\"pyq-exam-psc-buttons\"><a href=\"\/pyq\/pyq-upsc-ias-2013.pdf\" target=\"_blank\" class=\"psc-pdf-button\" rel=\"noopener\">Download PDF<\/a><a href=\"\/pyq-upsc-ias-2013\" target=\"_blank\" class=\"psc-attempt-button\" rel=\"noopener\">Attempt Online<\/a><\/div>\n<\/div>\n<section id=\"pyq-correct-answer\">\nThe correct answer is A) 1 only. Statement 1 is correct, while statement 2 is incorrect.<br \/>\n<\/section>\n<section id=\"pyq-key-points\">\nInflation is the decline of purchasing power of a given currency over time. When there is inflation, the real value of money decreases. Statement 1: Debtors benefit from inflation because the fixed amount of money they owe becomes less valuable in real terms when they repay it later. Statement 2: Bondholders (creditors) are typically harmed by inflation because the fixed interest payments they receive and the principal amount they get back at maturity are worth less in real terms due to the decreased purchasing power of money.<br \/>\n<\/section>\n<section id=\"pyq-additional-information\">\nInflation essentially redistributes wealth from creditors to debtors if the nominal interest rate is less than the inflation rate (resulting in a negative real interest rate). Fixed-income earners, savers, and people holding cash also tend to lose during periods of high inflation, while those with flexible incomes or assets that appreciate faster than inflation may benefit or be protected.<br \/>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>Consider the following statements: 1. Inflation benefits the debtors. 2. Inflation benefits the bond-holders. Which of the statements given above is\/are correct? [amp_mcq option1=&#8221;1 only&#8221; option2=&#8221;2 only&#8221; option3=&#8221;Both 1 and 2&#8243; option4=&#8221;Neither 1 nor 2&#8243; correct=&#8221;option1&#8243;] This question was previously asked in UPSC IAS &#8211; 2013 Download PDFAttempt Online The correct answer is A) 1 &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"Consider the following statements:\n  1. Inflation benefits the debtors\" class=\"read-more button\" href=\"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-1-inflation-benefits-the-debtors\/#more-91110\">Detailed Solution<span class=\"screen-reader-text\">Consider the following statements:<br \/>\n  1. Inflation benefits the debtors<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1092],"tags":[1467,1120,1190],"class_list":["post-91110","post","type-post","status-publish","format-standard","hentry","category-upsc-ias","tag-1467","tag-economic-development","tag-money-banking","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Consider the following statements:  1. Inflation benefits the debtors<\/title>\n<meta name=\"description\" content=\"The correct answer is A) 1 only. Statement 1 is correct, while statement 2 is incorrect. Inflation is the decline of purchasing power of a given currency over time. When there is inflation, the real value of money decreases. Statement 1: Debtors benefit from inflation because the fixed amount of money they owe becomes less valuable in real terms when they repay it later. Statement 2: Bondholders (creditors) are typically harmed by inflation because the fixed interest payments they receive and the principal amount they get back at maturity are worth less in real terms due to the decreased purchasing power of money.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-1-inflation-benefits-the-debtors\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Consider the following statements:  1. Inflation benefits the debtors\" \/>\n<meta property=\"og:description\" content=\"The correct answer is A) 1 only. Statement 1 is correct, while statement 2 is incorrect. Inflation is the decline of purchasing power of a given currency over time. When there is inflation, the real value of money decreases. Statement 1: Debtors benefit from inflation because the fixed amount of money they owe becomes less valuable in real terms when they repay it later. Statement 2: Bondholders (creditors) are typically harmed by inflation because the fixed interest payments they receive and the principal amount they get back at maturity are worth less in real terms due to the decreased purchasing power of money.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-1-inflation-benefits-the-debtors\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T10:47:04+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Consider the following statements:  1. Inflation benefits the debtors","description":"The correct answer is A) 1 only. Statement 1 is correct, while statement 2 is incorrect. Inflation is the decline of purchasing power of a given currency over time. When there is inflation, the real value of money decreases. Statement 1: Debtors benefit from inflation because the fixed amount of money they owe becomes less valuable in real terms when they repay it later. Statement 2: Bondholders (creditors) are typically harmed by inflation because the fixed interest payments they receive and the principal amount they get back at maturity are worth less in real terms due to the decreased purchasing power of money.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-1-inflation-benefits-the-debtors\/","og_locale":"en_US","og_type":"article","og_title":"Consider the following statements:  1. Inflation benefits the debtors","og_description":"The correct answer is A) 1 only. Statement 1 is correct, while statement 2 is incorrect. Inflation is the decline of purchasing power of a given currency over time. When there is inflation, the real value of money decreases. Statement 1: Debtors benefit from inflation because the fixed amount of money they owe becomes less valuable in real terms when they repay it later. Statement 2: Bondholders (creditors) are typically harmed by inflation because the fixed interest payments they receive and the principal amount they get back at maturity are worth less in real terms due to the decreased purchasing power of money.","og_url":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-1-inflation-benefits-the-debtors\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2025-06-01T10:47:04+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-1-inflation-benefits-the-debtors\/","url":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-1-inflation-benefits-the-debtors\/","name":"Consider the following statements: 1. Inflation benefits the debtors","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2025-06-01T10:47:04+00:00","dateModified":"2025-06-01T10:47:04+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"description":"The correct answer is A) 1 only. Statement 1 is correct, while statement 2 is incorrect. Inflation is the decline of purchasing power of a given currency over time. When there is inflation, the real value of money decreases. Statement 1: Debtors benefit from inflation because the fixed amount of money they owe becomes less valuable in real terms when they repay it later. Statement 2: Bondholders (creditors) are typically harmed by inflation because the fixed interest payments they receive and the principal amount they get back at maturity are worth less in real terms due to the decreased purchasing power of money.","breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-1-inflation-benefits-the-debtors\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-1-inflation-benefits-the-debtors\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-1-inflation-benefits-the-debtors\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"UPSC IAS","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/upsc-ias\/"},{"@type":"ListItem","position":3,"name":"Consider the following statements: 1. Inflation benefits the debtors"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/91110","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=91110"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/91110\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=91110"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=91110"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=91110"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}