Capital formation and accumulation depends upon the rate of __________, which in turn depends upon the level of income.

savings

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export demand

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import duties

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none of the above

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Solution

The correct option is A savings
There is a direct relation between savings and investment in an economy and capital formation and accumulation depends on the investment in the economy. So if there will be more savings in the economy then capital formation and accumulation will increase and vice versa.

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