An increase in human capital
A) increases the productivity of labor.
B) decreases the productivity of labor.
C) increases the productivity of labor only if there is a corresponding technological change.
D) increases the capital-labor ratio.

Question

Quizplus · Accepted Answer

Human capital refers to the knowledge, skills, and abilities that individuals acquire through education, training, and experience. Since human capital increases the knowledge and skills available to workers, it results in higher productivity, leading to greater output per worker. Therefore, an increase in human capital increases the productivity of labor.

An Increase in Human Capital