Q.

Capital formation in an economy depends on -

A. Total Income
B. Tot al demand
C. Total savings
D. Total production
Answer» C. Total savings
Explanation: Capital formation refers to capital accumulation, referring to the total "stock of capital" that has been formed, or to the growth of this total capital stock. It also refers to a measure of the net additions to the (physical) capital stock of a country (or an economic sector) in an accounting interval, or, a measure of the amount by which the total physical capital stock increased during an accounting period.
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