"A child, too, with investments made on her education and health, can yield a high return in future." This concept is most closely related to

The correct option is

Human Capital Formation

Explanation

Human Capital Formation is the process of transforming the population of a country into a productive asset through investments in education, healthcare, and training. It treats human beings as a resource capable of generating economic value.

Detailed Analysis:

• Human Capital Formation is Correct: The statement describes the core principle of Human Capital Formation. Just as investment in physical capital (machines, land) yields returns, investment in a child's education and health increases their future productivity, earning potential, and contribution to the economy. This transforms a human being into "human capital."
• Physical Capital Formation is Incorrect: Physical Capital Formation refers to the accumulation of tangible, non-human assets such as machinery, buildings, tools, and infrastructure used in the production process.
• Fixed Asset Creation is Incorrect: Fixed Asset Creation is a specific component of physical capital formation, involving the acquisition of long-term assets like plants and equipment, not human development.
• Working Capital Management is Incorrect: Working Capital Management involves managing a firm's short-term assets (cash, inventory) and liabilities to ensure smooth day-to-day operations. It is unrelated to long-term investment in human capabilities.

Key Takeaway:

Human Capital Formation is the qualitative improvement of the population through education and health, converting them from a liability into a productive economic asset.