Consider the following statements :
Human capital formation as a concept is better explained in terms of a process which enables
- 1.individuals of a country to accumulate more capital.
- 2.increasing the knowledge, skill levels and capacities of the people of the country.
- 3.accumulation of tangible wealth.
- 4.accumulation of intangible wealth.
Which of the statements given above is/are correct ?
Show answer
Answer: C. Human capital formation means increasing people's knowledge, skills and abilities through education, health and training (statement 2). These are intangible assets, so it is accumulation of intangible wealth (statement 4). Statements 1 and 3 describe physical capital. So 2 and 4.
Watch for: The word 'capital' tempts students to pick 'accumulate more capital'.
Why the other options are wrong
- A. Wrong because accumulating more capital refers to physical capital, not human capital.
- B. Wrong because accumulation of intangible wealth is also correct.
- D. Wrong because accumulating capital and tangible wealth describe physical capital.
Source to check: NCERT Class 11 'Indian Economic Development', Chapter 5 'Human Capital Formation in India'
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.