Explanation:

Capital-output ratio is the amount of capital required to produce output worth Re. 1. If Y stands for output or income and K for the stock of capital used to produce that output, then K/Y represents capital-output ratio. It is useful to distinguish between marginal capital-output ratio and average capital-output ratio. Whereas average capital-output ratio describes the ratio of total capital to total output or income of the economy, marginal capital-output ratio is ratio of incre­ment in the stock of capital to the increment in output.