UPSC CIVIL SERVICES PRELIMINARY EXAMINATION

UPSC Prelims 2018— Question 50

2018General Studies Paper-IEconomyFinancial Marketsmoderate
Q50

Question

Despite being a high saving economy, capital formation may not result in significant increase in output due to

Options

A
weak administrative machinery
B
illiteracy
C
high population density
D
high capital-output ratio✓ Correct Answer
AnswerOption D

Explanation

**Concept and analysis:** The capital-output ratio indicates the amount of capital required to generate a unit of additional output. A high capital-output ratio means that more investment is needed for a given increase in output, so the productivity of capital is comparatively low. Consequently, even a high saving rate may not translate into a large output increase when the capital-output ratio is high. The question is testing precise UPSC-level identification rather than a broad association. The key is to distinguish the exact institutional, constitutional, historical, geographical, economic or scientific feature being asked. **Option-wise evaluation** **Option A:** Incorrect. weak administrative machinery is a different institution, place, definition, proposition or description and does not satisfy the specific requirement of the question. **Option B:** Incorrect. illiteracy is a different institution, place, definition, proposition or description and does not satisfy the specific requirement of the question. **Option C:** Incorrect. high population density is a different institution, place, definition, proposition or description and does not satisfy the specific requirement of the question. **Option D:** Correct. high capital-output ratio directly matches the concept or factual identification established in the analysis. **UPSC takeaway:** The safest way to solve this type of question is to anchor the answer in the defining feature of the concept and then test every option against that feature. Closely related institutions or terms are often used as distractors. In statement-based questions, do not judge the option as a whole before checking each statement independently. In factual questions, compare the wording of each option with the exact definition, location, institutional role, chronology or scientific property. The correct answer follows from that verification rather than from familiarity with a keyword.

Question Classification

SubjectEconomy
TopicFinancial Markets
SubtopicTerminal topic
Question TypeDirect MCQ
Difficultymoderate
VerificationVerified