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?

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.

This question was asked in UPSC CSE Prelims 2024, GS Paper 1, as Question 51. It falls under Indian Economy > International Institutions & Reports.

This question is rated "moderate". It requires sound conceptual understanding of the topic.

UPSC has asked 37 questions from International Institutions & Reports (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.