The correct option is (c).
Explanation
Human Capital Formation refers to the process of adding to the stock of skilled and capable people in a country over time. It transforms human resources into human capital through investments in education, health, on-the-job training, migration, and information. It is distinct from physical capital formation.
Statement-wise Analysis
- Statement 1 is Incorrect: The phrase "accumulate more capital" generally refers to the accumulation of physical or financial assets (Gross Capital Formation). While human capital is a form of capital, the statement is too broad and typically implies physical capital accumulation rather than the specific development of human capabilities.
- Statement 2 is Correct: This is the precise definition of human capital formation. It is the process of increasing the knowledge, skill levels, and productive capacities of the population, thereby enhancing their ability to contribute to economic growth.
- Statement 3 is Incorrect: Tangible wealth refers to material assets that can be seen and touched, such as machinery, buildings, and land. Human capital is internal to the individual and is not a material object.
- Statement 4 is Correct: Human capital is classified as intangible wealth. It comprises assets such as expertise, health, and education, which are not physical in nature but possess significant economic value and generate returns.
Key Takeaway
Human Capital Formation is the accumulation of intangible wealth in the form of knowledge, skills, and health. It is distinct from physical capital formation, which involves the accumulation of tangible assets.