Explain economic factors capital formation?

Question

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Answer

Capital Formation:

Capital formation is the main key to economic growth.
Capital formation refers to the net addition to the existing stock of capital goods which are either tangible like plants and machinery or intangible like health, education and research.
Capital formation helps to increase productivity of labour and thereby production and income.
It facilitates adoption of advanced techniques of production.
It leads to better utilization of natural resources, industrialization and expansion of markets which are essential for economic progress.

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