Multiple choice

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

The last five years have seen a surge in private corporate savings as companies became more efficient and increased their profitability. That has been accompanied by a rise in public sector savings on the back of increased fiscal prudence. However, the current economic situation is putting pressure on both corporate profitability and the public finances, ensuring that savings in these two sectors are unlikely to grow as rapidly as in the past. Household savings will therefore remain crucial to sustaining a strong saving rate. This means private and public sector savings will remain distant competitors to household savings.

What is the central idea of the passage?

  1. To show that private companies have become more efficient

  2. To demonstrate that there is no real substitute to the private sectors

  3. To show that despite surge in private corporate savings, household savings remain crucial

  4. To demonstrate that public sector savings despite enforced fiscal prudence faces a bleak scenario

  5. To show that in the present economic scenario both private and private sector savings will have a very subdued role to play
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Household savings remain crucial for sustaining a strong saving rate despite surge in private corporate savings. This is the key. Hence, the central idea of the passage.

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