The model was extended to establish a relationship between financial development and economic growth. Co-integration results show that capital–output ratio and rate of growth of human capital have positive effects on real rate of growth of GDP, irrespective of the indicator of stock market development. An increase in the market capitalization dampens economic growth, whereas turnover has no significant effect, and an increase in the money market rate of interest has a positive effect on economic growth in India.
The passage best supports the statement that:
Answer: B
Explanation: Option B is the correct answer.