How is human capital different from physical capital in terms of mobility across countries?
Answer & explanation
Correct answer: option 3
The two forms of capital i.e. Physical and Human, differ in terms of mobility across space. Physical capital is completely mobile between countries except for some artificial trade restrictions. Human capital is not perfectly mobile between countries as movement is restricted by nationality and culture. Therefore, physical capital formation can be built even through imports, whereas human capital formation is to be done through conscious policy formulations in consonance with the nature of the society and economy and expenditure by the state and the individuals.