The Incremental ___-Output Ratio (ICOR) is a metric used to assess the efficiency of investment in an economy; a lower value indicates that less additional capital is required to produce one extra unit of economic output.
- India Debt Resolution Company Ltd (IDRCL)
- 75
- bracket creep (or fiscal drag)
- Capital
Answer: Capital
ICOR is a crucial indicator of an economy's structural health and technological progress. A high ICOR indicates inefficiency, poor infrastructure, and bureaucratic delays (meaning massive investments yield little growth). Conversely, a low ICOR signifies high capital productivity, advanced technology, and efficient resource allocation, allowing the economy to grow rapidly without requiring unsustainably high savings rates.