Which of the following statements best describes the characteristics of accumulating physical capital and human capital?

Question

Quizplus · Accepted Answer

Physical capital accumulation, such as building factories or buying machinery, is subject to diminishing marginal returns because additional units of capital become less productive as more and more are used. On the other hand, human capital accumulation, such as education and training, is not subject to diminishing marginal returns, as the skills and knowledge gained from each additional unit of investment can increase the productivity of the worker.

Which of the Following Statements Best Describes the Characteristics of Accumulating