Explanation:

Capital formation is a term used to describe the net capital accumulation during an accounting period for a particular country. The term refers to additions of capital stock, such as equipment, tools, transportation assets and electricity.

Capital output ratio is the amount of capital needed to produce one unit of output. If COR is high, despite saving high and generating enough capital, our output may not grow significantly because the COR is high. .For example, to produce 10 unit of output, 50 unit of capital is needed. Hence, the capital-output ratio is high, there will not be significant increase in output despite high savings and investment.