3 Indian & AP Economy and Planning · 3.2.3 Growth and development

3.2.3.2 Saving, investment and capital formation: GCF, GFCF and ICOR

Capital formation is the addition to the stock of machines, buildings and inventories, financed by saving, and the ICOR tells how much capital a unit of extra output needs.

  • APPSC Group 1
  • Advanced level
  • 6 min read
  • Full course

Key terms

  • saving
  • investment
  • gross capital formation
  • GFCF
  • change in stocks
  • valuables
  • net investment
  • depreciation
  • ICOR
  • Harrod-Domar
  • current account deficit

What this note covers

  1. Core factsFoundation
  2. ExplainedStandard
  3. DeeperAdvanced
  4. Mains writingMains writing
  5. Common trapsFoundation
  6. Quick revisionFoundation

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