If the demand for human capital increases, interest rates and the cost of investment _____, and investment in human capital _____.

Question

Quizplus · Accepted Answer

When the demand for human capital increases, it typically leads to higher interest rates as firms and individuals compete for funds to invest in human capital, thus increasing the cost of investment. Consequently, investment in human capital increases because the expected returns from such investment are perceived to be higher, justifying the higher costs.

If the Demand for Human Capital Increases, Interest Rates and the Cost