Read the two statements and choose the correct option.
I. Both physical and human capital involve spending now for returns in the future.
II. Physical capital is formed partly by individuals' own choices, while human capital is formed only by the state.

Only ICorrect answerYour answerOnly IICorrect answerYour answerBoth I and IICorrect answerYour answerNeither I nor IICorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

Both are investments: a cost now and a stream of returns later. I is true.
Families and firms invest heavily in education and training too, so II is false.

Ten questions from Human Capital Formation, at your own pace.

Ten questions from Human Capital Formation, at your own pace.

Read the two statements and choose the correct option.I. Both physical and human capital involve spending now for returns in the future.II. Physical capital is formed partly by individuals' own choices, while human capital is formed only by the state.