An increase in human capital:

Question

Quizplus · Accepted Answer

An increase in human capital, which refers to the skills, knowledge, and experience that workers possess, results in improved productivity of labor. Workers with more human capital are able to perform their jobs more effectively, leading to higher levels of output. There does not need to be a corresponding technological change for the increase in human capital to have an effect on productivity. The capital-labor ratio may increase if investment in human capital is part of a broader investment in physical capital, but this is not directly related to the productivity of labor. Therefore, option B is the best choice. Option D is incorrect because an increase in human capital would not lead to a decrease in productivity.

An Increase in Human Capital