Correct answer: (d) high capital-output ratio
Explanation
- A
weak administrative machinery
(a) Weak administrative machinery. Administration can waste investment, but the precise efficiency link in the stem is the capital–output ratio, not bureaucracy as such. This is not the key.
- B
illiteracy
(b) Illiteracy. Human-capital gaps matter for growth, yet they are not the definitional reason high saving fails to raise output here. This is not the key.
- C
high population density
(c) High population density. Density is not the capital-efficiency statistic in the question. This is not the key.
- D
high capital-output ratio
(d) High capital-output ratio. (d) Official key: Capital–output ratio is capital required per unit of extra output. If it is high, even a large saving–investment effort yields little additional output. That is the stored key.
Summary. Official key is (d) high capital-output ratio. Saving finances investment, but output response depends on how much capital each extra unit of GDP needs. A high ratio means weak productivity of capital. Administration, literacy and density are other constraints, not this identity. Honour the stored letter (d).
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