ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Labor is the effort that people contribute to the production of goods and services.

Detailed explanation-2: -Human capital consists of the knowledge, skills, and health that people invest in and accumulate throughout their lives, enabling them to realize their potential as productive members of society.

Detailed explanation-3: -1) What is human capital formation? Answer: Human capital formation refers to the process of adding to the stock of human capital over time. It is the process of acquiring and increasing the number of skilled and experienced people. It is essential for the development of an economy.

Detailed explanation-4: -They are called human capital because people cannot be separated from their knowledge, skills, health, or values in the way they can be separated from their financial and physical assets. Education, training, and health are the most important investments in human capital.

Detailed explanation-5: -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.