Which of the following statement/statements are true?
Statement 1: Human capital formation is mainly an economic and technical process.
Statement 2: Physical capital formation is partly a social process and partly a conscious decision of the possessor of the human capital.
Statement 1: Human capital formation is mainly an economic and technical process.
Statement 2: Physical capital formation is partly a social process and partly a conscious decision of the possessor of the human capital.
Answer & explanation
Correct answer: option 2
Physical capital formation is mainly an economic and technical process. The entrepreneur possesses knowledge to calculate the expected rates of return to a range of investments and then rationally decides which one of the investments should be made. Human capital formation is partly a social process and partly a conscious decision of the possessor of the human capital. Children are given different types of school education and health care facilities by their parents and the society.