how are production consumption and capital formation inter related.
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To sum up, whatever is produced is disposed of either for consumption or for capital formation or both. These three activities, production, consumption and capital formation are inter- related. An increase in the production of goods and services increases the level of consumption and capital formation.
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This increase in the stock of capital goods in a year is called capital formation or investment. ... These three activities, production, consumption and capital formation are inter- related. An increase in the production of goods and services increases the level of consumption and capital formation
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