capital output ratio

Definition

The ratio of capital used to produce an output over a period of time. This ratio has a tendency to be high when capital is cheap as compared to other inputs. For instance, a country with abundant natural resources can use its resources in lieu of capital to boost its output, hence the resulting capital output ratio is low.

Use this term in a sentence

You should try to break down your capital output ratio so that you know how much you are spending at all times.

​ Was this Helpful? YES  NO 10 people found this helpful.

I could not determine the capital output ratio, so I had my friend work with it instead of me, which was the best idea.

​ Was this Helpful? YES  NO 3 people found this helpful.

The capital output ratio was the most useful metric for our project because our concerns were with efficiency of inputs.

​ Was this Helpful? YES  NO 10 people found this helpful.

Show more usage examples...

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
capital outflow capital project