ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -When society increases the level of capital per person, we call the result capital deepening. The idea of capital deepening can apply both to additional human capital per worker and to additional physical capital per worker.

Detailed explanation-2: -Which of the following will increase the level of human capital in an economy? An increase in literacy rates.

Detailed explanation-3: -Capital deepening refers to an increase in the proportion of the capital stock to the number of labor hours worked. Movements in this ratio are closely tied to movements in labor productivity, all other things held equal. An increase in capital per hour (or capital deepening) leads to an increase in labor productivity.

Detailed explanation-4: -Economies can increase human capital by subsidizing (providing government funds for) increased level of education. A second example involves job training programs. Similar to education, job training programs also improve worker skills.

Detailed explanation-5: -Human capital and human development are interrelated concepts but they are not identical. While human capital refers to the stock of a nation’s human skills and expertise at a particular point of time human development refers to holistic development and well being of a nation’s human capital.