Question

Business potential of a country is determined by _______.

• A. Saving
• B. Investment
• C. National income
• D. Both (A) and (B)

Answer 1

Answer: (D)

Both (A) and (B)

Business potential basically means how effectively a business is growing through its retained earnings. Therefore, the business potential can be judged from two aspect :-

1. Savings :

It judges the business potential in a negative manner. If the business has more savings then it has less potential to grow and vice-versa.

2. Investment:

It judges the business potential in a positive manner. If the business has more investment then it has more potential to grow and vice-versa.