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National Income / Capital Formation

1 UPSC Prelims MCQs tagged "National Income / Capital Formation". Free practice with answer keys, explanations, and timed mock tests on Anantam IAS.

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Consider the following statements about domestic capital formation:
Consider the following statements about domestic capital formation:
1. AOnly 1
2. BOnly 2
3. CBoth 1 and 2
4. DNeither 1 nor 2
Answer and explanation
Correct answer: C
Gross domestic capital formation is funded by domestic saving plus net capital inflow from abroad, so statement 1 is correct. India measures its rate of capital formation as a ratio of investment to GDP, so statement 2 is also correct.
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Indian Economy UPSC GPSC-2026 Medium