Q. The ICOR (incremental capital-output ratio) of country A increased from 3 in 2000 to 3.5 in 2010. Which of the following statements is/are correct about country A?
Which of the statements given above is/are correct?
Explanation:
ICOR = CapitalProductivity
Statement 1 is incorrect. Higher ICOR means lower productivity.
Statement 2 is incorrect. Reasons for high ICOR: Unskilled Labour, Non-professional management, Obsolete Technology, Lack of Competition.