UPSC Exam > UPSC Questions > Consider the following statements with refere...
Start Learning for Free
Consider the following statements with reference to the Gross Fixed Capital Formation (GFCF):
1. It consists of resident producers’ investments, deducting disposals, in fixed assets during a given period.
2. Developing economies possess more fixed capital per capita than developed economies.
Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
Consider the following statements with reference to the Gross Fixed Ca...
The failure of private investment, as measured by private Gross Fixed Capital Formation (GFCF) as a percentage of GDP at current prices, to pick up pace has been one of the major issues plaguing the Indian economy.
About Gross Fixed Capital Formation (GFCF):
- GFCF refers to the growth in the size of fixed capital in an economy.
- Fixed assets/capital are tangible or intangible assets produced as outputs from production processes that are used repeatedly, or continuously, for more than one year.
- GFCF consists of resident producers’ investments, deducting disposals, in fixed assets during a given period.
- It also includes certain additions to the value of non-produced assets realized by producers or institutional units.
- Private GFCF can serve as a rough indicator of how much the private sector in an economy is willing to invest.
- Overall GFCF also includes capital formation as a result of investment by the government.
- GFCF matters because fixed capital, by helping workers produce a greater amount of goods and services each year, helps to boost economic growth and improve living standards.
- In other words, fixed capital is what largely determines the overall output of an economy and, hence, what consumers can actually purchase in the market.
- Developed economies such as the U.S. possess more fixed capital per capita than developing economies such as India.
- Statistics:
- GFCF in the Indian economy increased significantly from INR 32.78 lakh crore in 2014-15 to INR 54.35 lakh crore in 2022-2023.
- This surge in capital formation reflects substantial investments in infrastructure, industry, and public goods.
Hence only statement 1 is correct.
Free Test
FREE
| Start Free Test |
Community Answer
Consider the following statements with reference to the Gross Fixed Ca...
Explanation:
Statement 1 is correct because Gross Fixed Capital Formation (GFCF) refers to the total value of a country's acquisitions of new or existing fixed assets, such as machinery, equipment, buildings, and infrastructure, for use in the production process. This includes resident producers' investments in fixed assets during a given period, while deducting any disposals.
Statement 2:
Statement 2 is incorrect. Developed economies generally possess more fixed capital per capita compared to developing economies. Developed countries have higher levels of industrialization and infrastructure development, leading to a higher stock of fixed capital per person. Developing economies, on the other hand, often have lower levels of capital investment per capita due to limited resources and infrastructure development.
Therefore, the correct answer is option A) 1 only, as only statement 1 is correct.
Statement 1 is correct because Gross Fixed Capital Formation (GFCF) refers to the total value of a country's acquisitions of new or existing fixed assets, such as machinery, equipment, buildings, and infrastructure, for use in the production process. This includes resident producers' investments in fixed assets during a given period, while deducting any disposals.
Statement 2:
Statement 2 is incorrect. Developed economies generally possess more fixed capital per capita compared to developing economies. Developed countries have higher levels of industrialization and infrastructure development, leading to a higher stock of fixed capital per person. Developing economies, on the other hand, often have lower levels of capital investment per capita due to limited resources and infrastructure development.
Therefore, the correct answer is option A) 1 only, as only statement 1 is correct.
Attention UPSC Students!
To make sure you are not studying endlessly, EduRev has designed UPSC study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in UPSC.
|
Explore Courses for UPSC exam
|
|
Top Courses for UPSCView all
Consider the following statements with reference to the Gross Fixed Capital Formation (GFCF):1. It consists of resident producers’ investments, deducting disposals, in fixedassetsduring a given period.2. Developing economies possess more fixed capital per capita than developed economies.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?
Question Description
Consider the following statements with reference to the Gross Fixed Capital Formation (GFCF):1. It consists of resident producers’ investments, deducting disposals, in fixedassetsduring a given period.2. Developing economies possess more fixed capital per capita than developed economies.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements with reference to the Gross Fixed Capital Formation (GFCF):1. It consists of resident producers’ investments, deducting disposals, in fixedassetsduring a given period.2. Developing economies possess more fixed capital per capita than developed economies.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements with reference to the Gross Fixed Capital Formation (GFCF):1. It consists of resident producers’ investments, deducting disposals, in fixedassetsduring a given period.2. Developing economies possess more fixed capital per capita than developed economies.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?.
Consider the following statements with reference to the Gross Fixed Capital Formation (GFCF):1. It consists of resident producers’ investments, deducting disposals, in fixedassetsduring a given period.2. Developing economies possess more fixed capital per capita than developed economies.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements with reference to the Gross Fixed Capital Formation (GFCF):1. It consists of resident producers’ investments, deducting disposals, in fixedassetsduring a given period.2. Developing economies possess more fixed capital per capita than developed economies.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements with reference to the Gross Fixed Capital Formation (GFCF):1. It consists of resident producers’ investments, deducting disposals, in fixedassetsduring a given period.2. Developing economies possess more fixed capital per capita than developed economies.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?.
Solutions for Consider the following statements with reference to the Gross Fixed Capital Formation (GFCF):1. It consists of resident producers’ investments, deducting disposals, in fixedassetsduring a given period.2. Developing economies possess more fixed capital per capita than developed economies.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for UPSC.
Download more important topics, notes, lectures and mock test series for UPSC Exam by signing up for free.
Here you can find the meaning of Consider the following statements with reference to the Gross Fixed Capital Formation (GFCF):1. It consists of resident producers’ investments, deducting disposals, in fixedassetsduring a given period.2. Developing economies possess more fixed capital per capita than developed economies.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Consider the following statements with reference to the Gross Fixed Capital Formation (GFCF):1. It consists of resident producers’ investments, deducting disposals, in fixedassetsduring a given period.2. Developing economies possess more fixed capital per capita than developed economies.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?, a detailed solution for Consider the following statements with reference to the Gross Fixed Capital Formation (GFCF):1. It consists of resident producers’ investments, deducting disposals, in fixedassetsduring a given period.2. Developing economies possess more fixed capital per capita than developed economies.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of Consider the following statements with reference to the Gross Fixed Capital Formation (GFCF):1. It consists of resident producers’ investments, deducting disposals, in fixedassetsduring a given period.2. Developing economies possess more fixed capital per capita than developed economies.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Consider the following statements with reference to the Gross Fixed Capital Formation (GFCF):1. It consists of resident producers’ investments, deducting disposals, in fixedassetsduring a given period.2. Developing economies possess more fixed capital per capita than developed economies.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice UPSC tests.
|
|
Explore Courses for UPSC exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup