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Questions
What is the meaning of capital formation?
Explain the meaning of capital formation.
What is capital formation?
Solution
- Capital formation refers to a rise in a country's stock of real capital.
- Making more capital items, such as machines, equipment, tools, power, factories, and transportation, to be employed in the production of products and services, is what capital creation entails.
- Saving and investing are vital for increasing the stock of capital.
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