Capital formation: This refers to the net increase in the capital stock of a country, which includes physical capital (machinery, buildings) and human capital (skills, education). High savings: A high savings economy implies people are saving a significant portion of their income. Ideally, these savings are then invested to create new capital. Capital-output ratio (COR): This ratio measures the amount of additional capital needed to produce one unit of additional output (GDP). A high COR indicates that even with high savings and investment, the increase in output might be low. Hence, option D is the Correct Answer.