Which of the following statements about human capital is true?

• A. Human capital refers to the skills, knowledge, and experience possessed by individuals that can enhance their productivity.
• B. Human capital only includes physical assets such as machinery and buildings.
• C. Human capital is unrelated to education and training.
• D. Investing in human capital has no impact on economic growth.

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the definition of human capital. Human capital refers to the attributes that individuals acquire through education, training, experience, and skills that increase their productivity and economic value.
2. Step 2: Identify what human capital does NOT include. It does not include physical assets like machinery or buildings, which are considered physical capital, not human capital.
3. Step 3: Recognize the relationship between human capital and education/training. Education and training are key components of human capital because they enhance an individual's skills and knowledge.
4. Step 4: Consider the impact of investing in human capital. Investments in education and training typically lead to higher productivity and can contribute positively to economic growth.
5. Step 5: Evaluate the given statements based on these concepts to determine which one correctly describes human capital.