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Question
The Five-Year Plans achieved the increase in the national income and the per capita income. How did this benefit the country?
The Five-Year Plans achieved the increase in the national income and the per capita income. How did this benefit the country?
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Solution
The correct option is D Capital formation
As the national and per capita income increase, individuals have more capital and more savings. More savings means that banks have more capital to loan out to corporates and the government to invest.
The investment made goes for the production of capital goods such as machinery, factories, transport equipment, bridges, power projects, dams, irrigation systems, etc. As capital formation increases, development also increases, benefitting the country overall.
As the national and per capita income increase, individuals have more capital and more savings. More savings means that banks have more capital to loan out to corporates and the government to invest.
The investment made goes for the production of capital goods such as machinery, factories, transport equipment, bridges, power projects, dams, irrigation systems, etc. As capital formation increases, development also increases, benefitting the country overall.
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