Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Indian Economic Development: Human Capital Formation in India

Question:

Depreciation of human capital can be reduced by which of the following way?

Options:

Investment in education

Investment in education and health

Investment in education, health and training

In the case of human capital, depreciation takes place with ageing and hence cannot be reduced.

Correct Answer:

Investment in education, health and training

Explanation:

Both forms of capital i.e. Physical and Human, depreciate with time but the nature of depreciation differs between the two. Continuous use of machine leads to depreciation and change of technology makes a machine obsolete. In the case of human capital, depreciation takes place with ageing but can be reduced, to a large extent, through continuous investment in education, health, etc. This investment also facilitates the human capital to cope with change in technology which is not the case with physical capital.