Question

Human Capital Formation refers to the process of:

Options

• Accumulating financial capital through savings and bank deposits

• Increasing a nation's productive capacity through investment in people - primarily through education and health

• Expanding a nation's productive capacity by importing foreign technology only

• Increasing a nation's productive capacity through investment in physical machinery

Answer 1

Human Capital Formation is defined as the process of increasing a nation's productive capacity through investment in people, primarily through education and health. Unlike physical or financial capital, it focuses on developing the knowledge, skills, and well-being of the population.