If capital markets are imperfect,high borrowing costs the acquisition of human capital but the rate of return.

Question

Quizplus · Accepted Answer

When capital markets are imperfect, borrowing costs are high which will discourage the acquisition of human capital. However, the rate of return on investment in human capital may increase because the available human capital becomes more scarce due to the high borrowing costs. Therefore, the option that fits this situation is "discourage, increase".

If Capital Markets Are Imperfect,high Borrowing Costs the Acquisition of Human