{"id":1752,"date":"2024-03-29T14:58:05","date_gmt":"2024-03-29T09:28:05","guid":{"rendered":"https:\/\/lotusarise.com\/qna\/?p=1752"},"modified":"2024-04-03T07:12:55","modified_gmt":"2024-04-03T01:42:55","slug":"q-despite-being-a-high-saving-economy-capital-formation-may-not-result-in-significant-increase-in-output-due-to","status":"publish","type":"post","link":"https:\/\/lotusarise.com\/qna\/upsc\/q-despite-being-a-high-saving-economy-capital-formation-may-not-result-in-significant-increase-in-output-due-to","title":{"rendered":"Q.\u00a0Despite being a high saving economy, capital formation may not result in significant increase in output due to"},"content":{"rendered":"\n<ul class=\"mcq wp-block-list\">\n<li>weak administrative machinery<\/li>\n\n\n\n<li>illiteracy<\/li>\n\n\n\n<li>high population density<\/li>\n\n\n\n<li>high capital-output ratio<\/li>\n<\/ul>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><strong>Answer:<\/strong>&nbsp;<strong>(d) high capital-output ratio<\/strong><\/p>\n<\/blockquote>\n\n\n\n<h5 class=\"wp-block-heading\" id=\"notes-hd-66067f79bcc3e\">Notes:<\/h5>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The&nbsp;<strong>capital-output ratio is the amount of capital needed to produce one unit of output<\/strong>.<\/li>\n\n\n\n<li>It is the relationship between the level of investment made in the economy and the consequent increase in Gross Domestic Product (GDP).<\/li>\n\n\n\n<li>It also expresses the relationship between the value of capital invested and the value of output.<\/li>\n\n\n\n<li><strong>High Capital-Output&nbsp;<\/strong>ratio means that&nbsp;<strong>more capital is needed to produce one unit of output&nbsp;<\/strong>due to which the increased capital formation may not result in significant increase in output.<\/li>\n<\/ul>\n\n\n\n<h6 class=\"wp-block-heading\" id=\"incremental-capital-output-ratio-icor\"><strong>Incremental Capital Output Ratio (ICOR)<\/strong><\/h6>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It is a variant of the Capital Output Ratio.<\/li>\n\n\n\n<li>The ICOR indicates an&nbsp;<strong>additional unit of capital or investment needed to produce an additional unit of output.<\/strong><\/li>\n\n\n\n<li>The utility of ICOR i0s that with a rise in investment, the capital-output ratio itself may change, and hence the usual capital-output ratio will not be useful.<\/li>\n<\/ul>\n\n\n\n<h6 class=\"wp-block-heading\" id=\"lower-capital-output-ratio-lcor\"><strong>Lower Capital Output Ratio (LCOR)<\/strong><\/h6>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>A&nbsp;lower capital-output ratio shows the productivity of capital and technological progress.<\/strong><\/li>\n\n\n\n<li>A lower capital-output ratio indicates that a lower level of investment is required to produce a given growth rate in the economy. This is considered to be a desirable situation.<\/li>\n\n\n\n<li>A lower capital-output ratio also shows that capital is very productive or efficient.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>How can the efficiency of capital be achieved?<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It is possible mainly through&nbsp;<strong>technological progress<\/strong>. With superior technology, the capital will be efficient to produce more output and the capital-output ratio will be lower.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Answer:&nbsp;(d) high capital-output ratio Notes: Incremental Capital Output Ratio (ICOR) Lower Capital Output Ratio (LCOR) How can the efficiency of capital be achieved?<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[1,3],"tags":[38],"years":[55],"class_list":["post-1752","post","type-post","status-publish","format-standard","hentry","category-upsc","category-prelims","tag-indian-economy","years-55"],"acf":[],"taxonomy_info":{"category":[{"value":1,"label":"UPSC"},{"value":3,"label":"Prelims"}],"post_tag":[{"value":38,"label":"Indian Economy"}],"years":[{"value":55,"label":"2018"}]},"featured_image_src_large":false,"author_info":{"display_name":"LotusArise","author_link":"https:\/\/lotusarise.com\/qna\/author\/team-lotusarise"},"comment_info":0,"category_info":[{"term_id":1,"name":"UPSC","slug":"upsc","term_group":0,"term_taxonomy_id":1,"taxonomy":"category","description":"","parent":0,"count":1269,"filter":"raw","cat_ID":1,"category_count":1269,"category_description":"","cat_name":"UPSC","category_nicename":"upsc","category_parent":0},{"term_id":3,"name":"Prelims","slug":"prelims","term_group":0,"term_taxonomy_id":3,"taxonomy":"category","description":"","parent":1,"count":1251,"filter":"raw","cat_ID":3,"category_count":1251,"category_description":"","cat_name":"Prelims","category_nicename":"prelims","category_parent":1}],"tag_info":[{"term_id":38,"name":"Indian Economy","slug":"indian-economy","term_group":0,"term_taxonomy_id":38,"taxonomy":"post_tag","description":"","parent":0,"count":225,"filter":"raw"}],"_links":{"self":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1752","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/comments?post=1752"}],"version-history":[{"count":0,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1752\/revisions"}],"wp:attachment":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/media?parent=1752"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/categories?post=1752"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/tags?post=1752"},{"taxonomy":"years","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/years?post=1752"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}