Official Answer Key & Detailed Solution
Ready to check the official UPSC Answer Key?
Click any option above to test yourself under exam conditions, or reveal the explanation directly.
Correct Answer: Option (C) — there is capital formation in X
Concept & Option Breakdown
Standard Reference VerifiedCapital formation refers to the net additions to fixed assets, machinery, infrastructure, and inventories. By expanding the productive capacity and raising the marginal productivity of labor, domestic capital formation in country X is a fundamental internal driver that directly and necessarily generates domestic economic growth.
Options (a) and (d) refer to global factors that may not impact Country X directly; population growth (b) without capital accumulation can lower per capita income. Only domestic capital formation (c) ensures internal productive expansion.
Practice Full-Length & Sectional Prelims Mocks on this Interface
50 simulated tests in the APT Prelims Test Series (₹1,493) or 1-on-1 Mentorship with Avinash Sir.