ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The formation of human capital raises production levels and leads to economic growth by adding to the GDP. Knowledgeable and skilled workers can make better use of resources at their disposal.

Detailed explanation-2: -Business investment can affect the economy’s short-term and long-term growth. In the short term, an increase in business investment directly increases the current level of gross domestic product (GDP), because physical capital is itself produced and sold.

Detailed explanation-3: -Human capital formation raises the production level and leads to economic growth by adding to GDP.

Detailed explanation-4: -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-5: -The GDP of a country tends to increase when the total value of goods and services that domestic producers sell to foreign countries exceeds the total value of foreign goods and services that domestic consumers buy. When this situation occurs, a country is said to have a trade surplus.