The term 'Capital Formation' is essential for economic growth because it:
A. Increases the stock of productive assets
B. Has no relation to productivity
C. Only increases consumption
D. Reduces the productive capacity of the economy
Answer: Option A
Solution (By JKSSB Mock Tests)
Capital formation involves net addition to the stock of capital goods, which enhances the productive capacity of the economy and supports long-term growth.
Explanation:
A soft currency is one that is not widely used in international transactions and may experience frequent fluctuations or limited convertibility, in contrast to hard currencies like the US dollar or euro.
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