Multiple choice

Directions: Answer the given question based on the following passage:

Savings play an important role in the economic growth of any country. Savings are also considered as backbone of investments. The neo-classical economists Robert M. Solow and T. W. Swan emphasized the role of savings which are translated into investment and investment in turn helps increase economic growth. An economy can have different forms of savings of which household savings generally constitute the largest share in aggregate savings. Other forms of savings comprise private corporate sector savings, public sector savings and foreign savings. Household savings are made either by way of direct physical assets or in the form of financial assets.

What is the underlying idea of the passage?

  1. To show that aggregate savings determine the status of economy

  2. To demonstrate the pre-eminence of household savings in a country's progress

  3. To discount the role of private corporate sector savings

  4. To lay down a policy framework for attracting investment in the form of household savings

  5. To determine the extent of household savings that would be necessary to sustain the economy of any country
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Usually, there are different forms of savings that contribute to a nation's economy. Household savings enjoys a pre-eminent position.

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