Question

37. Capital formation in underdeveloped
countries is a major bottleneck The
37
reason can be :
(A) Small size of market with no
Incentive for Investment
(B) Low level of Income
(C) Demonstration effect
(D) All of these​

Answer 1

Answer:

The answer will be option

(D) All of these

Explanation:

The term underdevelopment refers to that state of an economy where levels of living of masses are extremely low due to very low levels of per capita income resulting from low levels of productivity and high growth rates of population. Capital formation is a major challenge in underdeveloped countries. This is because size of market is small and demonstration effect which means people get influenced by others.

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