question_answer

Direction: 6 to 10

Read the following case study and answer the questions.

Mohan is an agricultural seasonal labourer who lives in a small rural area of Uttar Pradesh. His monthly per capita expenditure is Rs. 850 per month, when he works on agricultural farm. He depends upon his employer, the landowner for credit who charges an interest rate of 10% month. Mohan repays the money by working physically for the landowner on his farmland. At other times, he does odd jobs in the town. There are several months in a year when he has no work and thus even his basic needs are not met and needs credit to meet his daily expenses. During such times, his monthly per capita expenditure barely touches Rs. 350 per month.

Over the years his debt will

A) increase - because of increasing interest and non-repayment of monthly amount

B) remain constant - as he is working for the employer but is repaying less

C) reduce - as amount equivalent to his salary is being counted as monthly repayment

D) be totally repaid - as he is repaying the debt in the form of physical labour