Consider the following statements regarding the role of 'Human Capital' in economic growth: 1. It hinders innovations and inventions. 2. It facilitates the adaptation of new technologies. 3. It increases labour productivity. Which of the statements given above is/are correct?

The correct option is 2 and 3 only. Explanation Human capital refers to the stock of knowledge, skills, education, health, and training possessed by a population. In economic theory, human capital is treated as a critical engine of growth, distinct from physical capital, as it directly influences the efficiency and capability of the workforce. Statement-wise Analysis: - Statement 1 is Incorrect. Human capital is the primary source of new ideas and technological breakthroughs. A well-educated and skilled workforce drives research and development (R&D), thereby fostering innovations and inventions rather than hindering them. - Statement 2 is Correct. The availability of educated and skilled labour facilitates the diffusion and adaptation of new technologies. A knowledgeable workforce has the absorptive capacity required to understand and implement complex technologies effectively. - Statement 3 is Correct. Investment in human capital-such as through education, on-the-job training, and healthcare-improves the physical and mental capacity of workers. This enhancement leads to higher efficiency and output per worker, thereby increasing labour productivity. Key Takeaway: Human capital promotes economic growth by stimulating innovation, enabling the absorption of new technologies, and significantly enhancing the productivity of the labour force.

NCERT Class 11 Economics — Chapter 5: Human Capital Formation in India

mcqeasy

Consider the following statements regarding the role of 'Human Capital' in economic growth:

It hinders innovations and inventions.
It facilitates the adaptation of new technologies.
It increases labour productivity.

Which of the statements given above is/are correct?

Official previous-year question

Verified 1 Aug 2026.

Options

A1, 2 and 3
B2 only
C1 and 2 only
D2 and 3 only

Did you get this right?

Solution

The correct option is 2 and 3 only.

Explanation

Human capital refers to the stock of knowledge, skills, education, health, and training possessed by a population. In economic theory, human capital is treated as a critical engine of growth, distinct from physical capital, as it directly influences the efficiency and capability of the workforce.

Statement-wise Analysis:

Statement 1 is Incorrect. Human capital is the primary source of new ideas and technological breakthroughs. A well-educated and skilled workforce drives research and development (R&D), thereby fostering innovations and inventions rather than hindering them.
Statement 2 is Correct. The availability of educated and skilled labour facilitates the diffusion and adaptation of new technologies. A knowledgeable workforce has the absorptive capacity required to understand and implement complex technologies effectively.
Statement 3 is Correct. Investment in human capital-such as through education, on-the-job training, and healthcare-improves the physical and mental capacity of workers. This enhancement leads to higher efficiency and output per worker, thereby increasing labour productivity.

Key Takeaway:

Human capital promotes economic growth by stimulating innovation, enabling the absorption of new technologies, and significantly enhancing the productivity of the labour force.

Your note

More from Chapter 5: Human Capital Formation in India

"A sick labourer without access to medical facilities is compelled to abstain from work and there is loss of productivity." This statement highlights the importance of which source of human capital?

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With reference to the concept of ‘Human Capital’, consider the following statements: 1. It refers solely to the physical strength of the workforce. 2. Unlike physical capital, human capital is not perfectly mobile between countries. 3. Human capital formation is not solely a conscious decision of the possessor. Which of the statements given above is/are correct?

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Consider the following statements regarding the sources of human capital formation: 1. Social medicine refers to the use of medicine for social gatherings. 2. Preventive medicine includes vaccination. 3. Provision of clean drinking water is unrelated to health expenditure. Which of the statements given above is/are correct?

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With reference to ‘On-the-job training’ as a source of human capital, consider the following statements: 1. It may involve training workers within the firm or sending them for off-campus training. 2. Firms incur expenses on training as a charity without expecting returns. 3. Workers are often required to work for a specific period after training. Which of the statements given above is/are correct?

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Consider the following statements regarding the relationship between human capital and economic growth: 1. Empirical evidence proves a clear cause-and-effect relationship from human capital growth to economic growth in developing countries. 2. Higher income causes the building of a high level of human capital and vice versa. 3. Convergence in human capital measures has not led to a convergence in per capita real income. Which of the statements given above is/are correct?

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The correct option is 2 and 3 only.

Explanation

Statement-wise Analysis:

Statement 1 is Incorrect. Human capital is the primary source of new ideas and technological breakthroughs. A well-educated and skilled workforce drives research and development (R&D), thereby fostering innovations and inventions rather than hindering them.
Statement 2 is Correct. The availability of educated and skilled labour facilitates the diffusion and adaptation of new technologies. A knowledgeable workforce has the absorptive capacity required to understand and implement complex technologies effectively.
Statement 3 is Correct. Investment in human capital-such as through education, on-the-job training, and healthcare-improves the physical and mental capacity of workers. This enhancement leads to higher efficiency and output per worker, thereby increasing labour productivity.

Key Takeaway:

Human capital promotes economic growth by stimulating innovation, enabling the absorption of new technologies, and significantly enhancing the productivity of the labour force.