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The excess of national income over consumption constitutes saving of the community which is investment. From this the relationship between investments refers to investible surplus

The excess of national income over consumption constitutes saving of the community which is investment. From this the relationship between investments refers to investible surplus while capital formation is the net addition to the existing stock of capital. If any part of the investible surplus is used for the production of consumer goods, it fails to form capital formation. Discuss

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