The term 'Capital Formation' refers to: MCQ with Answer and Explanation

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The term 'Capital Formation' refers to:

A. Increase in population

B. Increase in the stock of capital goods

C. Increase in consumption

D. Increase in money supply

Answer: Option B

Solution (By JKSSB Mock Tests)

Capital formation refers to the net addition to the existing stock of capital goods such as machinery, buildings and equipment in an economy.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The 'Periodic Labour Force Survey' was started in which year?

A. 2018

B. 2015

C. 2019

D. 2017

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Correct Answer: Option D

Explanation:
PLFS was launched in 2017.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is a capital receipt in the government budget?

A. Tax revenue

B. Interest receipts

C. Dividends from public sector enterprises

D. Borrowings

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Correct Answer: Option D

Explanation:
Capital receipts create liability or reduce assets. Borrowings create a liability for the government and are therefore capital receipts. Tax revenue, interest receipts and dividends are revenue receipts.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Special Drawing Right' value is calculated based on a basket of currencies that includes which five currencies?

A. US dollar, euro, yen, pound, yuan

B. US dollar, euro, franc, pound, yuan

C. US dollar, euro, rupee, pound, yen

D. US dollar, euro, yen, pound, rupee

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Correct Answer: Option A

Explanation:
The SDR basket comprises US dollar, euro, Chinese yuan, Japanese yen and British pound.

This question belongs to: Economy GK Economy Set 1

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