ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Equipment and machinery will not be considered human capital as they are additional resources used by a firm to generate output and these equipment have their separate contribution in producing a good. Therefore, the given statement is false.

Detailed explanation-2: -What exactly is the difference between physical capital and human capital? Physical capital refers to tangible assets that assist in the production of a good. This includes machinery, buildings, transportation, computers, and software. Human capital refers to the economic value of an employee’s skill set.

Detailed explanation-3: -Human capital allows an economy to grow. When human capital increases in areas such as science, education, and management, it leads to increases in innovation, social well-being, equality, increased productivity, improved rates of participation, all of which contribute to economic growth.

Detailed explanation-4: -Land is not amongst the components of Human Capital.

Detailed explanation-5: -The Human Capital Index (HCI) quanties the contribution of health and education to the productivity of the next generation of workers. Countries are using it to assess how much income they forego because of human capital gaps, and how much faster they can turn these losses into gains if they act now.