GyanGramQuestion
In spite of being a high saving economy, capital formation may not result in a significant increase in output due to -
PRELIMS 2018 · INDIAN ECONOMY
In spite of being a high saving economy, capital formation may not result in a significan…
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• Correct Answer: D
• A high capital-output ratio means more capital is required to produce one unit of output, indicating inefficient capital utilization.
• Even with high savings and capital formation, a high COR results in minimal output increase.
• Administrative weakness, illiteracy, and population density do not directly explain this specific inefficiency.
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