How does depreciation differ between physical capital and human capit…

The correct answer is Option 3: Continuous investment can largely reduce depreciation in human capital while the same is not true for physical capital.

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.