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Capital formation is essentially a term used to describe a company or governments total accumulation of funds in an accounting year. This is commonly practiced in many businesses.

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Q: What is the definition of the term capital formation?
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What is the definition of Capital formation?

According to Ragnar Nurkse, "The meaning of 'Capital formation ' is that society does not apply the whole of its current productive activity to the needs and desires of immediate consumption, but directs a part of it to the making of capital goods: tools and instruments, machines and transport facilities, plant and equipment-all the various forms of real capital that can so greatly increase the efficacy of productive effort. The term is sometimes used to cover human as well as material capital. It can be made to include investment in skills, education and health-a very important form of investment." Ragnar Nurkse's definition merely implies the accumulation of material capital and neglects human capital.


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What is the definition of 'Capital Surplus'?

Capital Surplus is an accounting term, which may be referred to as Additional paid in capital. This is the additional amount over par value of the shares that is raised by a company.


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What are the source of human capital formation?

The sources of human capital formation under the creativity are education and health.The proper education and the proper maintenance of health and child birth can contribute towards human capital formation.


What is the definition of the term debt capital?

Debt capital is the money a business receives when it takes out a loan. The holders of the loan do not become share holders of the company; they are considered to be creditors.


Choose the term that fix this definition taxes imposed on the total assessed value of the shares of stock in a business?

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