Which of the statements given above is/are correct?
Options:
A . 1 only
B . Both 1 and 2
C . 2 only
D . Neither 1 nor 2
Answer: Option A Answer: (a) Inflation redistributes wealth from creditors to debtors i.e., lenders suffer and borrowers benefit out of inflation. Bondholders = this person has lent money (to debtors) and received a bond in return. So he is a lender, he suffers, by the way, they haven’t specifically used the word – “inflation-indexed bonds”, hence we cannot say inflation benefits the bond-holders.
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