Loading...
UPSC 2024: Consider the following statements: Statement-I: If the United States of America (USA) were to default on its debt, holders of US Treasury Bonds will not be able to exercise their claims to receive payment. Statement-II: The USA Government debt is not backed by any hard assets, but only by the faith of the Government. Which one of the following is correct in respect of the above statements?
(a)Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
(b)Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
(c)Statement-I is correct, but Statement-II is incorrect
(d)Statement-I is incorrect, but Statement-II is correct
Attempt This Question
Not attemptedCorrect Answer: (a) Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
US Treasury obligations are backed by the ‘full faith and credit’ of the US Government, not by any pledged hard assets; this makes Statement II correct. Even if a technical default occurred, bond-holders would still retain their legal claim and could ultimately demand payment through the courts or future appropriations, so Statement I is incorrect. Hence, Statement I is wrong while Statement II is right. ([vajiramandravi.com](https://vajiramandravi.com/upsc-exam/consider-the-following-statements-146/?utm_source=openai))
Related UPSC Questions
More from International Institutions & Reports
2025moderate
With reference to India, consider the following pairs: Organization — Union Ministry I. The National Automotive Board : Ministry of Commerce and Indus
2025moderate
Consider the following statements in respect of the International Bank for Reconstruction and Development (IBRD): I. It provides loans and guarantees
2019moderate
With reference to Asian Infrastructure Investment Bank (AIIB), consider the following statements: 1. AIIB has more than 80 member nations. 2. India is
Related Indian Economy Topics
2024National Income & Economic Growth
With reference to the sectors of the Indian economy, consider the following pairs: Economic activity — Sector 1. Storage of agricultural produce — Sec
2024Infrastructure & Industry
With reference to Corporate Social Responsibility (CSR) rules in India, consider the following statements: 1. CSR rules specify that expenditures that
Frequently Asked Questions
What is the correct answer to this UPSC 2024 Indian Economy question?▼
The correct answer is option (a): Both Statement-I and Statement-II are correct and Statement-II explains Statement-I. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this International Institutions & Reports question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2024, GS Paper 1, as Question 51. It falls under Indian Economy > International Institutions & Reports.
What is the difficulty level of this UPSC question?▼
This question is rated "moderate". It requires sound conceptual understanding of the topic.
How many UPSC Prelims questions have been asked from International Institutions & Reports?▼
UPSC has asked 39 questions from International Institutions & Reports (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.