Question

In an under-developed economy, the rate of Capital Formation and Investment is _________.

• A. low
• B. high
• C. moderate
• D. controlled by government policies

Answer 1

Answer: (A)

low

In an under-developed economy, the rate of Capital Formation and Investment is low. Employment opportunities and income generation are quite low in underdeveloped countries and hence as a consequence, capital formation or capital accumulation and investment function of the economy is quite low.Underdeveloped countries can be referred to those countries which are backward economically.