Question

What was/were the reason(s) of drop in savings in financial instruments after 2009?

• A. Rise in price level of gold
• B. Decrease in real interest rates on savings in financial instruments
• C. Investment in physical assets, particularly land
• D. Only (a) and (c)
• E. Only (b) and (c)

Answer 1

The correct option is C Investment in physical assets, particularly land

It is mentioned in the passage that, 'India has another facet: a penchant for physical assets (such as bullion or land). After the monsoon failure of 2009, and the attendant rise in price levels that has now become somewhat deeply entrenched, Indians have been stocking up on gold. Consequently, savings in financial instruments dropped while those in physical assets shot up.' Threrefore option (c) is correct.