ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Answer and Explanation: Capital goods are used to manufacture other goods. This statement is TRUE.

Detailed explanation-2: -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-3: -It is TRUE, that human capital formation creates physical capital. Physical capital consists of all the means of production that go towards producing goods and services. This capital can be in the form of plants and machinery, or services.

Detailed explanation-4: -Human capital is a stock concept because we are talking about a particular point of time whereas human capital formation is a flow concept because we are adding to the stock of human capital by developing new skills, training etc.