Human capital formation as a concept is best explained in terms of a process that enables 1. individuals of a country to accumulate more capital 2. increasing the knowledge, skill levels and capacities of the people of the country 3. accumulation of tangible wealth 4. accumulation of intangible wealth.
- A. 1 and 2 only
- B. 2 only
- C. 2 and 4 only
- D. 1, 3 and 4
Answer: C
Explanation
Human capital formation indicates, “the process of acquiring and increasing the number of persons who have the skills, education, and experience which are critical for the economic and the political development of the country. Human capital formation is thus associated with an investment in man and his development as a creative and productive resource.” Intangible wealth consists of factors such as the trust among people in a society, an efficient judicial system, clear property rights, effective government, and good education system, etc. Human capital formation enables the accumulation of intangible wealth. Hence option (b) is the correct answer.