question_answer

  "Loans from banks always help raise people's earning capacity". Justify this statement using suitable examples.         

Answer:

                  Business loans help to establish people's businesses, enabling them to earn more. The examples are (i) They can purchase machinery and equipment with a loan to start productive activities in manufacturing. (ii) With a loan, they can purchase raw material for processing into finished products, thus increasing their earning power. (iii) For seasonal items, by getting a loan against storage of finished goods produced during the off season, they can earn more by selling more during the season.