PRC-3 · Chapter 15 · Question 8 of 44
A nation notices that it requires Rs. 4 worth of new heavy machinery (capital) to permanently produce Rs. 1 worth of extra annual output. The value '4' is known as the:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Capital-Output ratio (v)
Explanation
The capital-output ratio (v) measures the amount of capital required to produce a single unit of output. It is a key variable in the accelerator model.
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