Question

Choose the correct order of capital formation.

विकल्प

• Mobilisation of savings → Investment → Savings

• Saving → mobilisation of savings → Investment

• Investment → Savings → mobilisation of savings

• None of the above

Answer 1

Saving → mobilisation of savings → Investment

Explanation:

The correct order of capital formation is:

1. Saving: Individuals and businesses set aside a portion of their income instead of consuming it, creating savings.
2. Mobilisation of Savings: These savings are then pooled together and made available for investment through financial institutions, such as banks, or directly through capital markets.
3. Investment: The mobilized savings are invested in productive assets or ventures, which contributes to capital creation and supports economic growth.