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State PCS PYQPrelims 2021

UPPCS · Question 102

With reference to 'Capital formation', which of the statements is/are correct? 1. The process of capital formation depends on savings and effectiveness of financial institutions. 2. Investment is the essential factor of capital formation. Select the correct answer using the codes given below.

  1. Only 1
  2. Only 2
  3. Both 1 and 2
  4. Neither 1 nor 2
Show answer & explanation

Answer: (C) Both 1 and 2

Explanation

Capital formation needs savings, their mobilisation by financial institutions, and their investment.