Consider the following statements about human capital and economic growth:
(A) Economic growth means the increase in real national income of a country.
(B) Job market information and migration also increase an individual’s income generating capacity.
(C) The labour skill of an educated person is more than that of an uneducated person, so the former generates more income.
(D) On-the-job training raises an individual’s income generating capacity, but job market information does not.
(E) Economic growth means the increase in the money income per head of a country.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A), (B) and (C) only
(A) Economic growth means the increase in real national income of a country. — Correct. Growth is a rise in real national income.
(B) Job market information and migration also increase an individual’s income generating capacity. — Correct. Along with education, health and training, they raise a person’s income generating capacity.
(C) The labour skill of an educated person is more than that of an uneducated person, so the former generates more income. — Correct. More skill means more income, and so more contribution to growth.
(D) On-the-job training raises an individual’s income generating capacity, but job market information does not. — Incorrect. Job market information raises income generating capacity too.
(E) Economic growth means the increase in the money income per head of a country. — Incorrect. Growth is measured by real national income, not money income per head.
NCERT (2026-27): “Human Capital and Economic Growth: … We know that the labour skill of an educated person is more than that of an uneducated person and that the former generates more income than the latter. Economic growth means the increase in real national income of a country; naturally, the contribution of the educated person to economic growth is more than that of an illiterate person. If a healthy person could provide uninterrupted labour supply for a longer period of time, then health is also an important factor for economic growth. Thus, both education and health, along with many other factors like on-the-job training, job market information and migration, increase an individual’s income generating capacity. …” |