A(n) _____ implies an increase in human capital.
A) addition of a new machine that laborers use in production
B) increase in wealth
C) more educated labor force
D) increase in the number of schools in a country
E) increase in the quantity of capital used by a firm

Question

Quizplus · Accepted Answer

Human capital refers to the skills, knowledge, and expertise possessed by individuals, which contributes to their ability to perform productive tasks. Therefore, an increase in the education level of the labor force implies an increase in human capital. The addition of a new machine (A) or an increase in the quantity of capital used by a firm (E) would increase physical capital, not human capital. An increase in wealth (B) can occur through various means and does not necessarily correlate with an increase in human capital. While an increase in the number of schools (D) could potentially lead to an increase in education and thus, human capital, it is not a guarantee without considering other factors, such as the quality of education being provided.

A(n) _____ Implies an Increase in Human Capital