CUET Preparation Today
| What distinguishes depreciation in physical capital from depreciation in human capital? |
Physical capital depreciates due to aging, while human capital depreciates due to continuous use. Physical capital depreciates due to continuous investment, while human capital becomes obsolete with age. Physical capital depreciates with technology changes, while human capital can reduce depreciation through education and health investment. Physical capital depreciates with use, while human capital depreciates due to changing demographics. |
| Physical capital depreciates with technology changes, while human capital can reduce depreciation through education and health investment. |
| 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. |
