Practicing Success

Target Exam

CUET

Subject

General Test

Chapter

General Knowledge

Topic

Economics

Question:

Why does a firm spend on the "Training" of their worker?

Options:

Source of human capital formation

Pressure of the corporate culture

Both 1 and 2

To show reduced profits to save tax

Correct Answer:

Source of human capital formation

Explanation:

Expenditure regarding on-the-job training is a source of human capital formation as the return of such expenditure in the form of enhanced labor productivity is more than the cost of it i.e., the amount of money incurred by the company for the training of the employee will eventually turn out to be less than the return the employee would provide to the organization in the long run.