Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Indian Economic Development: Human Capital Formation in India

Question:

How do physical capital and human capital differ in terms of mobility between countries?

Options:

Both are completely mobile between countries.

Physical capital is more mobile due to its tangible nature.

Human capital is more mobile due to its intangible nature.

Human capital is less mobile due to nationality and culture restrictions.

Correct Answer:

Human capital is less mobile due to nationality and culture restrictions.

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.