UPSC Prelims 2013
Economy
Economic growth in country X will necessarily have to occur if
Explanation
* Internally capital formation takes place when a country does not spend all its current income on consumption, but saves a part of it and uses it for investment to increase further production. This act of saving and investment is described as capital accumulation or capital formation. * Capital formation refers to investments in physical and human capital, such as building new factories, improving infrastructure, and educating the workforce. Increased capital allows for greater production and innovation.
Linked concepts
Revision pages for syllabus ideas tested in this PYQ.