Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Indian Economic Development: Human Capital Formation in India

Question:

How is human capital different from physical capital in terms of mobility across countries?

Options:

Human capital is completely mobile between countries, while physical capital is restricted by nationality and culture.

Physical capital is limited in mobility between countries due to trade restrictions, while human capital can be easily transferred.

Human capital is limited in mobility between countries due to nationality and culture, while physical capital can be built through imports.

There is no difference in mobility of physical and human capital in the context of globalisation.

Correct Answer:

Human capital is limited in mobility between countries due to nationality and culture, while physical capital can be built through imports.

Explanation:

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.