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Human capital formation


19. Consider the following statements.
Human capital formation as a concept is better explained in terms of a process which enables.
a) Individuals of a country to accumulate more capital.
b) Increasing the knowledge, skill levels and capacities of the people of the country.
c) Accumulation of tangible wealth.
d) Accumulation of intangible wealth.
Which of the statements given above is/are correct?
1) 1 and 2
2) 2 only
3) 2 and 4
4) 1,3 and 4
Ans: 3) 2 and 4
Explanation:-
  • While Increasing the knowledge, skill levels and capacities of the people of the country. is  the very meaning of human capital accumulation,  Accumulation of intangible wealth also increases due to it only, for example, patents, copyrights, etc.
  • Human  capital,  intangible  collective  resources  possessed  by  individuals  and  groups  within  a  given population. These resources include all the knowledge, talents, skills, abilities, experience, intelligence, training, judgment, and wisdom possessed individually and collectively, the cumulative total of which represents  a  form  of  wealth  available  to  nations  and  organizations  to  accomplish  their  goals.  
  • Thus, statements 1 and 3 are incorrect. Statements 2 and 4 are correct.


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