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Suppose Gross Capital Formation as a Percentage of GDP Is

Question 58

Multiple Choice

Suppose gross capital formation as a percentage of GDP is low but the economic growth rate is high. Which of the following can be inferred about the economy from this information?


A) The services sector forms a large proportion of the GDP of the economy.
B) The level of private sector investment in assets like buildings, factories and equipment is
C) The proportion of output that is used for renewal of existing capital is likely to be low.
D) The manufacturing sector forms a large proportion of the GDP of the economy.

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