Question

According to rostow capital formation depends on the

Answer 1

According to economist Walt Whitman Rostow,capital flow or investment level in the economy essentially depends on the productivity of agricultural sector and generating maximum social overhead cost in this process.

Explanation:

Based on Rostow's concept of formation,agricultural productivity is the central key to induce higher capital formation as it is one of the economic sectors capable of generating surplus production which can be essentially used for export purposes in the international market and hence,could ensure capital inflow to the country through foreign reserve earnings.It can also fulfill the consumer demand for food commodities in the domestic economy through excess production level and ascertain food security for the burgeoning urban population.According to Rostow,increased agricultural productivity can also support other domestic industries such as manufacturing and processed food products.Now,much of the social overhead cost generation depends on the government or public sector intervention.The maximization of social overhead cost,according to Rostow will eventually benefit many of the domestic economic sectors but however,it should be controlled and monitored by only public sector.