CHAPTER-5-HUMAN CAPITAL FORMATION

MULTIPLE CHOICE QUESTIONS

1 In Indian economy for the first time which five year plan considered Human Resources
Development an essential aspect for development strategy?
a) 3rd five year plan
b) 5th five year plan
c) 7th five year plan
d) 10th five year plan
2 What does AICTE stand for?
a) All India Council for Technology Education
b) All India Council for Technical Education
c) All India Commission for Technology Education
d) All India Commission for Technical Education
3 Human capital is called an investment that brings:
a) Qualitative improvement in labour
b) Quantitative improvement in labour
c) Both
d) None
4 Human capital and Human Development are_____.
a) Opposite concepts
b) Different concepts
c) Related concepts
d) Both means are same
5 ................ adversely affect the quality of human capital
a) High growth rate of population
b) High growth rate of employment
c) Deficient manpower planning
d) Both A and C

6 human capital refers to the stock of *

a) Wealth
b) Assets
c) Expertise
d) All of above
7 People generally, do ........................... in search of jobs which give them higher salaries than that
they may get in their native places.
a) Invest
b) Work
c) Think
d) Migrate

8 Health expenditure directly increases .................................. in the economy.

a) Amount of capital
b) Certain amount of profit
c) Supply of healthy labour force
d) Number of industries

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9 Education is required for the people because it is capable of..............................
a) Conferring higher learning capacity on the people
b) Giving people a better social standing and pride
c) Enabling people to make better choices in life
d) Providing knowledge to understand the changes taking place in society.
10 Among these which state has the highest literacy rate in India:
a) Mizoram
b) Kerala
c) Himachal Pradesh
d) Rajasthan
11 A person becomes a human resource when he or she: *
a) Is willing to work
b) Is able to work
c) Belong to a particular age group
d) All the above
12 People at which age group are treated as productive labour force?
a) 15-35
b) 60-70
c) 15-60
d) 0-6
13 HDI index rates all countries on a scale *
a) 0 TO 5
b) 0 TO 10
c) 0 TO 1
d) 1 TO -1
14 When did NavodayaVidyalaya established in India on the concept of Model school?
a) !985-86
b) 1986-87
c) 19988-89
d) 1987-88
15 NarvodayaVidyalaya were established to give modern education of goods standard to talented
students in
a) Urban area
b) Rural area
c) Only for Physically disabled students
d) Both A and B

16 Individuals invest in education with the objective of:

(a) Increasing their future income
(b) Accelerating the development process
(c) Facilitating adaptation of new technologies
(d) All of these
17 The stock of skill, ability, expertise, education and knowledge in a nation at a point of time
known as:
(a) Humann development
(b) Human resource
(c) Human capital
(d) None of these

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18 Following is the source of human capital formation.
(a) Investment in education
(b) Investment in health
(c) Expenditure on the job training
(d) All of these
19 The objective of midday meal is:
(a) to boost universalisation of primary education
(b) to boost the nutritional status of children in schools
(c) to increase enrolment attendance and retention, and also improving the nutritional status of
children in school
(d) to boost universalisation of upper primary level of education
20 When was Right to Education Act enacted?
(a) 2008
(b) 2009
(c) 2010
(d) 2011
21 Which of the following organisations functions as an apex organisation to provide quality
school education:
(a) National Council of Educational Research and Training
(b) University Grant Commission
(c) All India Institute of Technical Education
(d) National Teachers Training Programme
22 Which of the following is not a merit of human capital formation?
(a) Improves technical knowledge
(b) Enlarges the size of business
(c) Increases cost of production
(d) Changes social outlooks
23 Which of the following institutes comes under the health sector?
(a) NCERT
(b) UGC
(c) AICTE
(d) ICMR
24 Which of the following is not an example of physical capital?
(a) Machinery
(b) Raw material
(c) Building
(d) Education and knowledge in people
25 Match and choose the correct combination. (i)
Preventive medicine (A) medical intervention during illness
(ii) Curative medicine (B) vaccination (iii) Social
medicine (C) the spread of health literacy
(a) (i) – (B); (ii) – (A); (iii) – (C)
(b) (i) – (A); (ii) – (B); (iii) – (C)
(c) (i) – (C); (ii) – (B); (iii) – (A)
(d) (i) – (B); (ii) – (C); (iii) – (A)
26 Which level of education takes a major share of total education expenditure in India?
(a) Secondary
(b) Higher
(c) Elementary
(d) Tertiary

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27 Which of the following is not the role of on-the-job training?
(a) Encourages innovation
(b) Eradicate inequality
(c) Promotes modern methods
(d) Enhances productivity
28 Indicator of growth of education sector
(a) Life expectancy rate
(b) Infant mortality rate
(c) Literacy rate
(d) None of these
29 The two major sources of human capital in a country are-------
(a) Investment in Education and health
(b) Investment in Education and on the job training
(c) Investment in Education and migration
(d) Investment in education and information
30 What was the share of education in total government expenditure in 2014?
(a) 7.93 percent
(b) 10.6 percent
(c) 15.7 percent
(d) 8.9 percent

31 The stock of skill and expertise of a nation at a particular point of time is known as:
(A)Physical capital
(B) Social infrastructure
(C) Human capital
(D) Financial capital
32 Which of the following is an example of preventive medicine?
(A) Spread of health literacy
(B) Vaccination
(C) Medical intervention during illness
(D) All of these
33 Education attainment is measured by the two-third weighted average of the______ and one-third
weight __________ .
(A) Adult literacy rate, mean years of schooling
(B) Literacy rate, mean years of primary schooling
(C) Adult gross literacy rate, mean years of schooling
(D) Adult literacy rate, mean years of secondary schooling

34 The ________ Amendment of the Constitution of India made Free and compulsory education a
fundamental right for all children in the age group of 6-14 years.
(A)86th
(B) 70th
(C) 42th
(D) 75th
35 Health expenditure directly increases the supply of healthy
(A) Food
(B) Laboure
(C) Human
(D) None of these

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36 Which is the problem of human capital formation in India?
(A) Decreasing population
(B) High academic level
(C) Brain drains
(D) Gender equality
37 Which of the following are not a source of Human Capital Formation?
(A) Saving
(B) Information
(C) Education
(D) Health
38 Which of the following is/are examples of physical capital?
(A) Building
(B) Machine
(C) Both machine and building
(D) Skill
39 Secondary level education for age group:
(A)13-15 years
(B)15-18 years
(C)12-18 years
(D)18-21 years
40 If ________capital represents production capacity of a nation, ________ capital is the cause that
designs machines.
(A) Physical, Financial
(B) Financial, Human
(C) Physical, Human
(D) Human, Physical
41 What percent of GDP was recommended by the Education Commission (1964-66) to be spent on the
education sector?
(A) 3%
(B) 4%
(C) 5%
(D) 6%
42 Which of the following are indicators of HDI are?
(A) On-the-job training
(B) Education
(C) Migration
(D) All of these
43 People as a resource means:
(A) Country’s natural capital in terms of their existing productive skill
(B)Country’s working capital in terms of their existing productive skill
(C)Country’s fixed capital in terms of their existing productive skill
(D)None of these.
44 Which of the following is false regarding Human Capital
(A) It is separable from its owner
(B) It increases the efficiency to produce tangible goods
(C) It can be built through policy
(D) It creates both private and social benefits

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45
Which of the following is not an indicator of education level?

(A) Years of schooling

(B) Life expectancy

(C) Teacher-pupil ratio

(D) Enrollment rate

46
Which level of education takes a major share of total education expenditure in India?

(A) Elementary

(B) Secondary

(C) Higher

(D) Tertiary

47
When was the Right to Education Act enacted?

(A) 2008

(B) 2009

(C) 2010

(D) 2012

48
Which of the following is not the role of on-the-job training?

(A) Eradicates inequality

(B) Encourages innovation

(C) Promotes modern methods

(D) Enhances productivity

49
Individuals invest in education with the objective of increasing their future __
A) income
B) production
C) service
D) GDP

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50
Human capital considers education and health as a means to increase ___
A) INCOME
B) productivity
C) Service
D) GDP
51 Which of the following is not an indicator of education level?

(A) Years of schooling

(B) Life expectancy

(C) Teacher-pupil ratio

(D) Enrolment rate

52
Which of the following is not a merit of human capital formation?

(A) Improves technical knowledge

(B) Enlarges the size of business

(C) Increases cost of production

(D) Changes social outlooks

53
Machines and buildings are

A. Human capital

B. None of these

C. Physical capital

D. Natural capital

54
The most important indicator of the status of education of a country is the

A. Death rate

B. Population rate

C. Birth rate

D. Literacy rate

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55
Human capital can be increased by incurring expenditure on

A. Increase in GDP
B. Improvement of health
C. Improvement in technology
D.All of these
56
What was the average youth literacy rate in 2015?

(A) 89.5 percent

(B) 74 percent

(C) 88 percent

(D) 95.5 percent

57
Human development is __ of human welfare.
A) A parameter C) An Attribute
B) An index D) None

58 which of the following is not an example of physical capital?

(a) machinery
(b) raw material
(c) building
(d) education and knowledge in people.
59 .............five-year plan recognised the importance of human capital?
(a) Expenditure on education
(b) Expenditure on infrastructure
(c) expenditure on defences
(d) expenditure on energy
60 which one of the following is a reason for poor human capital formation in India?
(a)Brain drain
( b) insufficient resources
(c) high growth of population
(d) all of these
61 how much educational cess has been imposed by the government on all union taxes?
(a) 1 percent
(b) 2percent
(c) 4 percent
(d) 5percent
62 which one of the following is a major sources of human capital formation in the country?
(a) Expenditure on education
(b) Expenditure on infrastructure
(c) expenditure on defences
(d) expenditure on energy

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63 the objectives of the mid-day meal scheme is.......................?

(a) to boost universalisation of primary education

(b) to boost nutritional status of children in schools
(c) to increase inrollment, attendence and retention.
(d)to boost universalisation of uper primary level of education
64 The human being need......................... to do the things efficiently.
(a) Friendship
(b) Brotherhood
(c) A good deal of training and skill
(d) Cooperation
65 Generally, individuals invest on education with an objective of what in mind...............................
(a) Increasing their future income
(b) Certain amount of profit
(c)Supply of healthy labour force
(d) To educate others
66 Health expenditure directly increases .................................. in the economy
(a) Increasing the total population
(b) Certain amount of profit
(c)Supply of healthy labour force
(d) Number of industries
67 Who spends on giving on-the job training to their workers
(a) Individuals
(b) Firm
(c)Health workers
(d) None of these

68 People generally, ........................... in search of jobs which give them higher salaries than that they may
get in their native places.
(a) Invest
(b)Think
(c) Migrate
(d) None of these
69 In Indian economy for the first time which five year plan assigned Human Resources
Development(Human Capital) a key role in the development strategy
(a) 5th five year plan
(b) 6th five year plan
(c) 7th five year plan
(d) 8th five year plan
70 The various organisations like NCERT,UGC,AICTE and CBSE in India come under which sector ?
(a) Health
(b) Education
(c) Energy
(d) Banking
71 AICTE Stands for
(a) All India council for Technology Education
(b) All India commission for Technology Education
(c)All India council of Technical Education
(d) All India commission for Technical Education

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72 ______ is the set of the people who make up the workforce of an organization, business sector,
industry, or economy
(a) Human capital
(b) Financial capital
(c) Physical capital
(d) Human Resource.

73 Following is the source of human capital formation.

a) Investment in education
b) Investment in health
c) Expenditure on the job training
d) All the above
74 The development of human capital formation requires.
a) Discipline
b) Honesty
c) Education
d) Mortality
75 What is the meaning of social medicine?
a) Spread of health literacy
b) Ensuring medicine to society
c) Opening medicine shops in society
d) All the above
76 Which of the following organisations functions as an apex organisation to provide quality school
education?
a) University Grants Commission
b) All India Council of Technical education
c) National Council of Educational Research and Training
d) Ministry of Education at the central level
77 What is Preventive medicine?
a) Vaccination
b) Providing proper medical facilities
c) Removing shortage of medicine in hospital
d) None of these.
78 What is curative medicine?
a) Vaccination
b) Medical intervention during illness
c) Spread of health literacy.
d) None of these
79 In India, Expenditure on education and health is the responsibility:
a) Union Government
b) State Government
c) Local Governments
d) All the above
80 One of the most urgent reasons for rural-urban migration in India is
a) Unemployment
b) Lack of education facilities
c) Lack of medical facilities
d) None of these

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81 Economic growth means
a) The increase in real national income
b) The increase in nominal national income
c) The increase in infrastructural facilities
d) The increase in employment opportunities.

82 Human capital treats human beings as

a) means
b) an end
c) both a and b
d) None of these
83 Which of the following is an example of Physical capital?
a) Machinery
b) Health of people
c) information
d) Education and Knowledge in people
84 In India, which of the following organizations regulate the health sector?
a) ICMR
b) UGC
c) AICTE
d) None of these
85 Which of the following is a reason for poor human capital formation in India?
a) Brain Drain
b) Low growth of population
c) Insufficient resources
d) All of these
86 Which of the following is a source of human capital formation?
a) Expenditure on transportation
b) Expenditure on infrastructure
c) Expenditure on Education
d) All of these
87 What is the full form of ICMR?
a) International Council of Medical Research
b) Indian Council of Medical Resources
c) International council of Medical Resources
d) Indian Council of Medical Research

88 The stock of skill, ability, expertise, education and knowledge in a nation at a point of time is called----
-----(Fill up the blank with correct option)
a) Human resources
b) Human capital
c) Human development
d) Physical capital
89 Which of the following is not a source of human capital?
a) Expenditure on education
b) Expenditure on health
c) Expenditure on construction of buildings
d) Expenditure on information

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90 Which of the following is false regarding human capital?
a) It can be built through policy formulation
b) It creates both private and social benefits
c) It increases the efficiency to produce tangible goods
d) It is separable from its owner
91 Investment in education means--------(Choose the correct option)
a) Income from education by the government
b) Expenditure on education by the government
c) Both (a) and (b)
d) None of these
92 The most important indicator of education status of a country is the------(Fill up the blank with
appropriate words)
a) Death rate
b) Literacy rate
c) Population rate
d) Birth rate
93 Human capital can be increased by incurring expenditure on------(Choose the correct option)
a) Improvement in technology
b) Increase in GDP
c) To control inflation
d) Improvement of health
94 ___________is an apex body which provides academic and technical support for qualitative
improvement of school education.
a) UGC
b) AICTE
c) NCERT
d) Ministry of education
95 Which of the following Organization controls health sector in India?
a) ICMR
b) UGC
c) AICTE
d) NCERT
96 Mrs. Neeraja, an economics teacher, is explaining “the total percentage of population of an area at a
particular time aged seven years or above who can read and write with understanding.” Which concept
is she explaining?
a) Enrolment ratio
b) Drop out ratio
c) Literacy rate
d) Pupil teacher ratio
97 Indicators of educational achievement---------
a) Primary education
b) Youth literacy rate
c) Adult literacy rate
d) All of these
98 Fill up the blank with appropriate word:
___________ is the prime funding authority for university education
(UGC/ AICTE)

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99 The objective of mid -day meal scheme is______________
a) To boost universalisation of primary education
b) To boost nutritional status of children in schools
c) To boost universalisation of upper primary level of education
d) To increase enrolment attendance and retention and also improve nutritional status of children
in school

100 Which of the following is not the example of physical capital?

(A) Machinery
(B) Raw Material
(C) Building
(D) Education
101 Which of the following is not considered as source of human capital formation?
(A) Education
(B) Training
(C) Health
(D) Machines
102 Covieshield/ Covaxin is the example of :
(A) Curative Medicines
(B) Preventive medicines
(C) Social Medicines
(D) None of the above
103 The Right to free and compulsory education act is applicable in which age group?
(A) 6-14 years
(B) 8-14 years
(C) 5-12 years
(D) 6-10 years
104 Which of the following is an indicator of educational achievements in a country?
(A) Adult literacy rate
(B) Youth Literacy rate
(C) Primary completion rate
(D) All of these
105 Which five year plan recognized the importance of Human capital?
(A) Third
(B) Fourth
(C) Sixth
(D) Seventh
106 What is the full form of ICMR?
(A) International council of Medical Research
(B) Indian Council of Medical Research
(C) International Council of Medical Resources
(D) Indian Council of Medical Resources
107 Which of the following is not correct in the context of human capital?
(A) Human capital is separable from its owner
(B) Movement of human capital is not perfectly mobile
(C) Human capital cannot be sold in the market like any other commodity
(D) All of these

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ANSWER

1-C 2-B 3-C 4-C 5-D 6-C 7-D 8-C 9-C 10-B
11-D 12-C 13-C 14-A 15-B 16-A 17-C 18-D 19-C 20-B
21-A 22-C 23-D 24-D 25-A 26-C 27-B 28-C 29-A 30-C
31-C 32-B 33-A 34-A 35-B 36-C 37-A 38-C 39-C 40-C
41-D 42-D 43-B 44-A 45-B 46-A 47-B 48-D 49-A 50-B
51-B 52-C 53-B 54-D 55-A 56-B 57-B 58-A 59-A 60-D
61-B 62-A 63-C 64-C 65-A 66-C 67-B 68-C 69-C 70-B
71-C 72-D 73-D 74-C 75-A 76-C 77-A 78-B 79-D 80-A
81-A 82-A 83-A 84-A 85-A 86-C 87-D 88-B 89-C 90-D
91-C 92-B 93-D 94-B 95-A 96-C 97-D 98-UGC 99-D 100-D
101-D 102-B 103-A 104-D 105-D 106-B 107-A

PREPIRED BY : PGT ECONOMICS OF BHUBANESWAR,

GUWAHATI, KOLKATA, RANCHI, SILCHAR AND TINSIKIA REGION .
VETTED BY : GUWAHATI REGION

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 CHAPTER-5-HUMAN CAPITAL FORMATION
CASE STUDY BASED QUESTIONS
1 Human capital is a key factor for growth, development, and competitiveness. More so
in recent times, within the modern context of development, human capital forms the
base of economic growth. This link works through multiple pathways at the individual,
firm and national level. Learning and skill building provide people with livelihoods, an
opportunity to contribute to their societies. They also contribute vitally to the
formation of one’s meaning and identity in life. Technological and corporate
innovation can only be fostered, in a decentralized manner, by a skilled talent pool.
This puts an onus on many developing countries that, at the various levels, equality of
opportunity in education and employment is necessary. Necessary as a skilled and
educated population doesn’t just contribute to economic development but also
towards positive social and political outcomes. That is why developing human capital
is often vital to develop countries with increasing working population.
But before we delve further, it becomes important to define the human capital.
1.Economic growth of a country depends on___
a) Physical capital
b) Human capital
c) Both A and B
d) Govt.political policies
2.What is the main centre idea emphasised in above case study.
a) The growing importance of technical institutions.
b) The growing importance of Human Capital
c) The growing physical changes in World
d)None of these
3.Why do we need to invest in human capital________
a) Increase income
b) Effective use of physical capital
c) Increase productive capacity
d) Both B and C
4.Before introducing to new technology, a firm provides basic skills to the workers for
its usage. This source of Human capital is called____
a) Study programmes for workers
b) On job training
c) Expenditure on information
d) Investment in education

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2 Just as a country can turn physical resources like land into physical capital like
factories, similarly, it can also turn human resources like nurses, farmers, teachers,
students into human capital like engineers and doctors. Societies need sufficient
human capital in the first place —in the form of competent people who have
themselves been educated and trained as professors and other professionals.
Investment in education is considered as one of the main sources of human capital.
There are several other sources as well. Investments in health, on- the job training,
migration and information are the other sources of human capital formation.
Education by individuals is similar to spending on capital goods by companies with the
objective of increasing future profits over a period of time. Likewise, individuals invest
in education with the objective of increasing their future income.
1.A person becomes a human resource when he or she: *
a) Is willing to work
b) Is able to work
c) Belong to a particular age group
d) All the above
2.Stock of ......... capital measures production capacity of a nation.
Financial / Physical
3.human capital refers to the stock of ________
a) Wealth
b) Assets
c) Expertise
d) All of above
4. Which of the following problem of human capital formation in India.
a) Brain drain
b) High population
c) Low academic standard
d)All of these

3 Human capital formation means investing in education, health and training programme of
the present and future manpower. It is the process of acquiring and increasing the number of persons
who have the skills, education, and experience, which are critical for the economic and the political
development of a country.
There are six ways of improving the quality of population
(1) Health facilities and services,
(2) Job training,
(3) Formally organized education at the elementary, secondary and the higher levels,
(4) Study programmes,
(5) Migration of individual by changing jobs and
(6) Social and economic equity.
Human capital defined as the productive investments in humans including their skills and health, that
are the outcomes of education, health care and on the-job training. The relationship between human

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 capital and human resources development stems from their focus on the use of the labour force in the
process of economic productivity, in the broader sense of the term. Human resources development
(HRD) views humans as resources to be trained, educated and developed within the system of an
organization for the purpose of enhancing the productivity of the organization through the expertise of
its workforce. The contents of HRD into two components:1) human development (psychology and
education) and (2) human capital (economic and management). Human capital approach, place HRD
at the strategic level within the organization. They found that employees as a resource that must be
trained in order to maintain the competitive advantage of the corporation and increase its value. In this
perspective activities become utilitarian in the organizational strategy to keep up with economic and
technological changes. Therefore, it is the economic potential and the economic rationale that provides
the impetus for investing in work placed training.

1. The relationship between human capital and human resources development stems focus on the use
of
(A) Labour force
(B) Work force
(C) Arm force
(D) Migration

2. HRD stands for: -

(A) Human Rural Development
(B) Human Resource Development
(C) Human Reform Development
(D) None of these

4 India has been ranked at the 116th position in the latest edition of the World Bank’s annual Human
Capital Index that benchmarks key components of human capital across countries.

However, India’s score increased to 0.49 from 0.44 in 2018, as per the Human Capital Index report
released by the World Bank on Wednesday.

The 2020 Human Capital Index update includes health and education data for 174 countries —
covering 98 per cent of the world’s population — up to March 2020, providing a pre-pandemic
baseline on the health and education of children, with the biggest strides made in low-income
countries.

The analysis shows that pre-pandemic, most countries had made steady progress in building human
capital of children, with the biggest strides made in low-income countries.

1.Human capital formation is a _______ process

2.What was the score of India in human capital index 2020?
3. Human capital index is published by.
(a) World bank
(b) IMF
(c) WTO
(d)UNESCO

5 The most powerful way to improve and expand the fruitful workforce in the state is by nourishing and
building up the education system. It is acknowledged as the root of human capital formation, that is
the reason why the parents and also the government spend more on education. Few objectives why

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 individual and state investment is more in education are:

● To develop their future income

● To build manpower and enhance their technical skills, to improve workers productivity, hence
resulting in economic growth
● To control the population growth rate by reducing the birth rate and making maximum
resources available per person.

● Knowledge and education can be transferred to others, resulting in social advantages.

The second major source of human capital formation is the health sector. A person who is
unwell will absolutely influence productivity. Few health-related investments are: providing
clean and safe drinking water, therapeutic medicines, etc.

An individual, to get higher salaries, good jobs, migrate from their native place to another place. In
India, unemployment is the reason for rural-urban migration. Other skilled and qualified individuals
like doctors, engineers, etc., migrate from one country to another in search of better opportunities.

In both the situations, migration involves transportation cost, cost of living in the migrated place, etc.

The increased incomes in the new place exceed the values of migration. Therefore, investment in
migration is another source of human capital formation.
To increase the labour productivity, many companies provide on-job training. This source of income
is expensive, and companies bear huge expenses for providing on-job training. Examples: in-house
training, training under a skilled supervisor, and off-campus training.
1.Expenditure on health can be done in the form of:
A) Preventive medicine
B) Curative medicine
C) Social medicine
D)All of these
2.Which five year plan recognizes the importance of human capital?
A) Second
B) Fourth
C) Seventh
D) Eighth

3.Problem of human capital formation is:

A) Low academic standards
B) Brain drain
C) Rinsing population
D) All of these

4.______ of human capital, refers to the ways of adding to the stock of capital.
a) Sources
b) Determinations of physical capital
c) Both a and b
d)None of these
6 The first ever Human Development Report (2001) of India has been released. It
focuses on the vital-facts related to bureaucratic controls and poor governance of the
country. The report was prepared by the planning Commission under the guidance of

4|Page 8 October 2021,ZIET BHUBANESWAR

its Deputy Chairman, Mr. K.C. Pant. This 297-page document was released on April 23,
2002 and submitted to the Prime Minister. The report states that from 1983 to 1993-
94, the Human Development Index (HDI) improved by nearly 2.6 per cent annum and
by over 3 per annum during the period 1993-2001. Rural and urban areas have shown
signs of improvement, according to the report.
Kerala, Punjab, Tamil Nadu, Maharashtra and Haryana have good HDIs. But states like
Bihar, Uttar Pradesh, Madhya Pradesh, Rajasthan and Orissa have HDIs close to nearly
one-half to that to Kerala. Funds must be distributed efficiently and effectively so that
human development processes do not suffer according to the report.
India’s growth in terms of HDI has shown dismal trends during the recent past. Lack of
resources, communal feelings and illiteracy are the chief causes of decay of the
average Indian. Further, politicians, bureaucrats and other elements of the
administration exploit the masses, executives, and business houses. The economic and
political systems need serious transformations. The socio-cultural fabric of the nation
cannot be weaved again because of religious compulsions. Ironically, we believe in
religion so that our passage into the next world could be smooth and sans agonies.
But we are least worried about our courses of action (and their outcomes) in this
world. Religion often forces us to dominate other communities and sects. We attack
them at opportune moments and face reprisals from them. This vicious cycle has been
going on in India for the past 3,000 years. In order to develop the quality of life of
Indians, the administration must become honest, efficient, productive and agile. Plant
workers must increase productivity and eschew violence and strikes Businessmen
must conduct their business operations with honesty; they never do so. Further,
political parties must guide the electorate and also, the masses towards prosperity
and not chaos. Our psyche has to be changed; a change of government cannot lead us
to a new era sans corruption and poor governance. Economic growth is linked to social
growth, moral awareness, health and education. Every industrialist must work for the
benefit of his or her nation. We have least interest in our nation and that is why, we
are not receiving anything from her. The targeted rate of growth (of GDP) for the
Tenth Plan is 8 per cent. However, the GDP growth rate during the Ninth Plan was a
meagre 5.4 per cent. During the Eighth Plan, this rate was 6.7 per cent. How can we
ensure consistent human development on a national scale if our results always fall
short of targets? Our economy should grow at the rate of 7-8 percent. During 2001-02,
it grew at the rate of 5.4

1. Which state is lag in good HDI according to this report.

a. Punjab.
b. Kerala.
c. Bihar
d. Tamilnadu.

5|Page 8 October 2021,ZIET BHUBANESWAR

 2. When was fist report on HRD was published.
a. In 1998
b. In 2000
c. In 2001
d. In 2005

3. What was the target for GDP Growth during 10th five-year plan?
a. 5%
b. 7%
c. 8%
d. 10%

4. Which is not related with human capital formation.

a. Education.
b. Health.
c. Skill.
d. Internet.

7 Education and health are very important sources of human capital formation. It is provided by both private
and public institutions. There is a need for government intervention in education and health as expenditure
make substantial long- term impact and they cannot be easily reversed. The role of government is to ensure
that the private providers of these services do not acquire monopoly power and thus exploit the consumer.
They should adhere to the standards stipulated by the government and charge the correct price. In India, the
ministries of education at the union and state level departments of education and various organisations like
NCERT, UGC, AICTE regulate the education sector. Similarly, the ministries of health at the union and state
level departments of health and various organisations like ICMR regulate the health sector.

1) Which of the following is not the indicator of educational achievement in a country?

a) Adult- literacy level
b) Primary education completion rate
c) life expectancy
d) Youth literacy rate
2) Choose the full form of AICTE:
a) All India Commission for Technical Education
b) All India Committee for Technical Education
c) All India Council for Technical Education
d) All India Council Technology Education
3) Which is the form of health expenditure?
a) Preventive medicine
b) Social- medicine
c) Curative medicine
d) All of these

6|Page 8 October 2021,ZIET BHUBANESWAR

8 The labour skill of an uneducated person and the former generates more income than the latter. Economic
growth means the increase in real national income of a country, naturally the contribution of the educated
person to economic growth is more than that of an illiterate person. If a healthy person could provide
uninterrupted labour supply for a longer period of time, then health is also an important factor for economic
growth. Thus, both education and health along with many other factors like on-the-job training, job market
information and migration, increase an individual’s income generating capacity. This enhanced productivity of
human beings or human capital contributes substantially not only towards increasing labour productivity but
also stimulates innovations and creates ability to absorb new technologies. Education provides knowledge to
understand changes in society and scientific advancements, thus facilitate inventions and innovations.
Similarly, the availability of educated labour force facilitates adaptation to new technologies.
A) __________means the increase in real national income of a country. (Fill up the blank with
appropriate words)
B) Human capital formation includes investment on:
a) Education
b) Improvement of health
c) Training of the workers
d) All of these
C)Assertion: Expenditure on health contributes to human capital formation.
Reason: Expenditure on health increases the efficiency and productivity level of a person.
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
c) Assertion (A) is true but Reason (R) is false.
d) Assertion (A) is false but Reason (R) is true.

D) Statement 1: Human capital and human development are identical concepts.

Statement 2: Human capital formation causes higher rate of participation
a) Both the statements are true.
b) Both the statements are false.
c) Statement 1 is true and Statement 2 is false
d) Statement 2 is true and Statement 1 is false

9 Case Study
Both the forms of capital formation- Physical and human - are outcomes of conscious investment
decisions.
Decision regarding investment in physical capital is taken on the basis of one’s knowledge in this
regard. The entrepreneur possesses knowledge to calculate the expected rates of return to a range of
investments and then rationally decides which one of the investments should be made. The ownership
of physical capital is the outcome of the conscious decision of the owner — the physical capital
formation is mainly an economic and technical process. A substantial part of the human capital
formation takes place in one’s life when she/he is unable to decide whether it would maximise her/his

7|Page 8 October 2021,ZIET BHUBANESWAR

earnings.
Children are given different types of school education and health care facilities by their parents and
the society. The peers, educators and society influence the decisions
regarding human capital investments even at the tertiary level, that is, at the college level. Moreover,
the human capital formation at this stage is dependent upon the already formed human capital at the
school level. Human capital formation is partly a social process and partly a conscious decision of the
possessor of the human capital.
You know that the owner of a physical capital, say a bus, need not be present in the place where it is
used; whereas, a bus-driver, who possesses the knowledge and ability to drive the bus, should be
present when the bus is used for transportation of
people and materials. Physical capital is tangible and can be easily sold in the market like any other
commodity. Human capital is intangible; it is endogenously built in the
body and mind of its owner. Human capital is not sold in the market; only the services of the human
capital are sold and, hence, there arises the necessity of the owner of the human capital to be present
in the place of production. The physical capital is separable from its owner, whereas, human capital is
inseparable from its owner. The two forms of capital differ in terms of mobility across space. Physical
capital is completely mobile between countries except for some artificial trade restrictions. Human
capital is not perfectly mobile between countries as movement is restricted by nationality and culture.
Therefore, physical capital formation can be built even through imports, whereas human capital
formation is to be done through conscious policy formulations in consonance with the nature of the
society and economy and expenditure by the state and the individuals.
Both forms of capital depreciate with time but the nature of depreciation differs between the two.
Continuous use of machine leads to depreciation and change of technology makes a machine obsolete.
In the case of human capital, depreciation takes place with ageing but can be reduced, to a large
extent, through continuous investment in education, health, etc. This investment also facilitates the
human capital to cope with change in technology which is not the case with physical capital.
Nature of benefits flowing from human capital are different from that of physical capital. Human
capital benefits not only the owner but also the society in general. This is called external benefit. An
educated person can effectively take part in a democratic process and contribute to the socio-economic
progress of a nation. A healthy person, by maintaining personal hygiene and sanitation, stops the
spread of contagious diseases and epidemics. Human capital creates both private and social benefits,
whereas physical capital creates only private benefit. That is, benefits from a capital good flow to
those who pay the price for the product and services produced by it.

8|Page 8 October 2021,ZIET BHUBANESWAR

1.Which of the following is not the characteristics of physical capital?
(A) It can be sold in the market
(B) It is intangible
(C) It can be separated from the owner.
(D) It depreciated over the period of time
2.Identify the statement which is correct in context of human capital.
(A) Human capital has social benefits
(B) Human Capital does not depreciate
(C) Human Capital can be separated from the owner
(D) All of the above
3.Read the statements – Assertion (A) and Reason (R) and choose the correct alternative from the
following:
Assertion (A) : Machines , buildings depreciate over a period of time whereas the knowledge of
doctors , engineers does not depreciate.
Reason (R ) : Friction, Weather , natural calamities , normal wear tear lead to depreciation of physical
capital . The depreciation of human capital take place in form of aging, death, diseases.

(A) Both Assertion (A) & Reason (R ) is true

(B) Both Assertion (A) & Reason (R ) is false
(C ) Assertion (A) is true & Reason ( R ) is False
(D)Assertion (A) is False & reason ( R )is true

4.Which of the following statement is true?

(A) Physical and Human capital are complementary and supplementary to each other
(B) Human capital and Human development aim at higher labour productivity
(C) Education is the only source of human capital formation
(D)Physical capital has external benefits

9|Page 8 October 2021,ZIET BHUBANESWAR

ANSWER

1 1-C
2-B
3-D
4-B
2 1-D
2-Physical
3-C
4-D
3 1-A
2-B
4 1-SOCIAL
2-0.64
3-WORLD BANK

5 1-D
2-C
3-D
4-A
6 1-C
2-C
3-C
4-D
7 1-C
2-C
3-D

8 1-ECONOMIC GROWTH
2-D
3-A
4-D
9 1-B
2-D
3-A
4-A

PREPIRED BY : PGT ECONOMICS OF BHUBANESWAR,

GUWAHATI, KOLKATA, RANCHI, SILCHAR AND TINSIKIA REGION .
VETTED BY : GUWAHATI REGION

10 | P a g e 8 October 2021,ZIET BHUBANESWAR

 CHAPTER-5-HUMAN CAPITAL FORMATION
TRUE AND FALSE QUESTIONS
1 Gender biasness in India is a hindrance to the process of skill formation
A)TRUE
B)FALSE
2 Stock of Physical capital measures production capacity of a nation
A)TRUE
B)FALSE
3 Human capital formation causes a higher rate of work participation
A)TRUE
B)FALSE
4 The educational cess imposed by the government is 4 % on all union taxes.
A)TRUE
B)FALSE
5 Expenditure on preventive, curative and social medicine etc. are various forms of
health expenditure
A)TRUE
B)FALSE
6 Investment in education, on the job training, health, migration and information are the sources of
human capital formation.
A)TRUE
B)FALSE
7 ‘Start-ups’ and ‘Skill India’ programmes are complementary to each other
A)TRUE
B)FALSE
8 Education, not the vocationalization of education is the core element of skill formation.
A)TRUE
B)FALSE
9 Gender bias in India is a hindrance to the process of skill formation.
A)TRUE
B)FALSE
10 Economic growth affects the human capital formation.
A)TRUE
B)FALSE
11 Rising population is not such a huge roadblock in the process of human capital formation in India
A)TRUE
B)FALSE
12 Human Capital Formation causes a higher rate of participation.
A)TRUE
B)FALSE

1|Page 8 October 2021,ZIET BHUBANESWAR

13 Ultimately human capital formation prompts the process of growth, and growth prompts the
process of human capital formation
A)TRUE
B)FALSE
14 Human capital formation enhances the productivity of physical capital.
A)TRUE
B)FALSE
15 “Land is a physical resource and Factory is a physical capital”. In the same way,
human resources like students can be converted into human capital like engineers,
doctors and teachers.
A)TRUE
B)FALSE
16 .."Human capital formation is partly a social process and partly a conscious decision
of the possessor of the human capital".
A)TRUE
B)FALSE
17 ."The physical capitals separable from its owner, whereas human capital is
inseparable from its owner"
A)TRUE
B)FALSE
18 Expenditure on Training is the source of human capital formation
A)TRUE
B)FALSE
19 Human development focusses on increasing labour productivity through education and health
expenditure
A)TRUE
B)FALSE
20 On the job training is not considered essential expenditure to promote human capital formation.
A)TRUE
B)FALSE

ANSWER

1-B 2-A 3-A 4-B 5-A 6-A 7-A 8-B 9-A 10-A
11-B 12-A 13-A 14-A 15-A 16-A 17-A 18-A 19A 20-B

PREPIRED BY : PGT ECONOMICS OF BHUBANESWAR,

GUWAHATI, KOLKATA, RANCHI, SILCHAR AND TINSIKIA REGION .
VETTED BY : GUWAHATI REGION

2|Page 8 October 2021,ZIET BHUBANESWAR

 CHAPTER-5-HUMAN CAPITAL FORMATION
ASSERTION- REASON QUESTIONS
1 Read the following statements - Assertion (A) and Reason (R):
Assertion (A) –Expenditure on migration is a source of human capital formation.
Reason(R) –Migration to other countries involves cost of transportation from one place to another and
higher cost of living in the migrated places.
From the given alternatives choose the correct one:
Alternatives:
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion
(A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion
(A).
c) Assertion (A) is true but Reason (R) is false.
d) Assertion (A) is false but Reason (R) is true.
2 Read the following statements - Assertion (A) and Reason (R):
Assertion (A) – There is no depreciation of human capital like physical capital.
Reason(R) – Investment is required to maintain efficiency of human capital.
From the given alternatives choose the correct one:
Alternatives:
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion
(A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion
(A).
c) Assertion (A) is true but Reason (R) is false.
d) Assertion (A) is false but Reason (R) is true.
3 Read the following statements - Assertion (A) and Reason (R):
Assertion (A) – Education contributes to economic growth.
Reason(R) - Education confers higher earning capacity on people.
From the given alternatives choose the correct one:
Alternatives:
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion
(A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion
(A).
c) Assertion (A) is true but Reason (R) is false.
d) Assertion (A) is false but Reason (R) is true.
4 Read the following statements - Assertion (A) and Reason (R):
Assertion (A) – Spread of education is necessary to control the population growth rate.
Reason(R) –Modernisation, gender equality and social awareness has deep impact on the mind set of
people.
From the given alternatives choose the correct one:
Alternatives:
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion
(A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion
(A).
c) Assertion (A) is true but Reason (R) is false.
d) Assertion (A) is false but Reason (R) is true.

1|Page 8 October 2021,ZIET BHUBANESWAR

5 Read the following statements - Assertion (A) and Reason (R):
Assertion (A)-Human capital formation is required for effective use of physical capital.
Reason(R) – Formation of human capital raises life expectancy of the people.
From the given alternatives choose the correct one:
Alternatives:
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion
(A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanationof Assertion
(A).
c) Assertion (A) is true but Reason (R) is false.
d) Assertion (A) is false but Reason (R) is true.
6 Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives
given below:
Assertion (A): Education on migration is the source of human capital formation.
Reason (R): Migration to other countries involves the cost of production from one place to another
and the higher cost of living on the migrated place.
(A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
Assertion (A)
(B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of
Assertion (A)
(C) Assertion (A) is true but Reason (R) is false.
(D) Assertion (A) is false but Reason (R) is true.
7 Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives
given below:
Assertion (A): Spread of education is necessary to control the population growth rate.
Reason (R): Human capital formation decreases quality of life.
(A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
Assertion (A)
(B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of
Assertion (A)
(C) Assertion (A) is true but Reason (R) is false.
(D) Assertion (A) is false but Reason (R) is true.
8 Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives
given below:
Assertion (A): Educated person is able to generate more income
Reason (R): The labour skill of an educated person is more than that of an uneducated person.
(A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
Assertion (A)
(B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of
Assertion (A)
(C) Assertion (A) is true but Reason (R) is false.
(D) Assertion (A) is false but Reason (R) is true
9 Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives
given below:
Assertion (A): Human Capital Formation is required for effective use of physical capital
Reason (R): Formation of human capital raises life expectancy of the people.
(A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
Assertion (A)
(B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of
Assertion (A)
(C) Assertion (A) is true but Reason (R) is false.
(D) Assertion (A) is false but Reason (R) is true
2|Page 8 October 2021,ZIET BHUBANESWAR
10 Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives
given below:
Assertion (A): The Apex body in the field of Medical Research is AICTE.
Reason (R): Reason (R): The Apex body in the field of Medical is Indian council of Medical
Research(ICMR).
(A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
Assertion (A)
(B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of
Assertion (A)
(C) Assertion (A) is true but Reason (R) is false.
(D) Assertion (A) is false but Reason (R) is true.
11 ASSERTION: Expenditure on education is the most effective way of enhancing and enlarging the
productive workforce in the country
REASON: Monetary benefits of education far exceed the cost of education.
(A) Assertion and reasons both are correct statements and reason is correct explanation for assertion.
(B) Assertion and reasons both are correct statements, but reason is not correct explanation for assertion.
(C) Assertion is correct statement, but reason is wrong statement.
(D) Assertion is wrong statement, but reason is correct statement.
12 ASSERTION: Human Capital formation is the process of adding to the stock of human capital over
time.
REASON: Migration contributes to human capital formation as it facilitates utilization of inactive skills
of the people.
(A) Assertion and reasons both are correct statements and reason is correct explanation for assertion.
(B) Assertion and reasons both are correct statements, but reason is not correct explanation for assertion.
(C) Assertion is correct statement, but reason is wrong statement.
(D) Assertion is wrong statement, but reason is correct statement.
13 ASSERTION: The Government of India tries to regulate the education sector through various
organizations.
REASON: Education promotes the cultural standard of the citizens.
(A) Assertion and reasons both are correct statements and reason is correct explanation for assertion.
(B) Assertion and reasons both are correct statements, but reason is not correct explanation for assertion.
(C) Assertion is correct statement, but reason is wrong statement.
(D) Assertion is wrong statement, but reason is correct statement.
14 ASSERTION: Human capital formation gives birth to innovation, invention, and technological
improvements.
REASON: Human capital formation generates a change in the emotional and material environments of
growth.
(A) Assertion and reasons both are correct statements and reason is correct explanation for assertion.
(B) Assertion and reasons both are correct statements, but reason is not correct explanation for assertion.
(C) Assertion is correct statement, but reason is wrong statement.
(D) Assertion is wrong statement, but reason is correct statement.
15 ASSERTION: Human capital formation facilitates innovations.
REASON: Innovation is the lifeline of growth.
(A) Assertion and reasons both are correct statements and reason is correct explanation for assertion.
(B) Assertion and reasons both are correct statements, but reason is not correct explanation for assertion.
(C) Assertion is correct statement, but reason is wrong statement.
(D) Assertion is wrong statement, but reason is correct statement.

3|Page 8 October 2021,ZIET BHUBANESWAR

16
ASSERTION (A) on the job training is a source of human capital formation.

REASON (B) after on the job training of employees, firm insist that workers should work for a
specific period of time.

(A) Both assertion and reason are true and the reason is the correct explanation of the assertion.
(B) assertion and reason both are true but reason is not the correct explanation of assertion.
(C) Assertion is true. Reason is false.
(D) Assertion is false. Reason is true

17
ASSERTION (A) education contributes to economic growth.

REASON (B) education confers higher earning capacity on people.

(A) Both assertion and reason are true and the reason is the correct explanation of the assertion.
(B) assertion and reason both are true but reason is not the correct explanation of assertion.
(C) Assertion is true. Reason is false.
(D) Assertion is false. Reason is true

18
ASSERTION (A) the spread of education is necessary to control the population growth.

REASON (B)human capital formation decreases the quality of life.

(A) Both assertion and reason are true and the reason is the correct explanation of the assertion.
(B) assertion and reason both are true but reason is not the correct explanation of assertion.
(C) Assertion is true. Reason is false.
(D) Assertion is false. Reason is true

19
ASSERTION (A) the facilities for the formation of human capital have remained adequate.

REASON (B) the resources allocated to human capital formation have been much less than the
resources.

(A) Both assertion and reason are true and the reason is the correct explanation of the assertion.
(B) assertion and reason both are true but reason is not the correct explanation of assertion.
(C) Assertion is true. Reason is false.
(D) Assertion is false. Reason is true

20 ReadthefollowingAssertion(A)andReason(R)andchoosethecorrectalternativesgivenbelow:
Assertion(A):Educationcontributestoeconomicgrowth.
Reason(R):Educationconfershigherearningcapacity onpeople.
a) Both Assertion (A) and Reason (R) are true and R is the correct explanation of
Assertion(A.)
b) BothAssertion(A)andReason(R)are truebutReason(R)isNOTthecorrect
explanation f Assertion (A)
c) Assertion(A)istrue butReason(R)isfalse.
d) Assertion(A)isfalse butReason(R)istrue

4|Page 8 October 2021,ZIET BHUBANESWAR

21 Read the following Assertion(A) and Reason (R) and choose the correct alternatives given below
Assertion (A): On the job training is a source of human capital formation.
Reason (R): After on the job training of employees, firm insist that the workers should work for
specified period of time.
(A) Both Assertion (A) and Reason (R) are true and R is the correct explanation of Assertion (A.)
(B) Both Assertion (A) and Reason (R) are true but Reason (R) is NOT the correct explanation of
Assertion (A)
(C) Assertion (A) is true but Reason (R) is false.
(D) Assertion (A) is false but Reason (R) is true
22 Read the following Assertion (A) and Reason (R) and choose the correct alternatives given below
Assertion (A): The facilities for the formation of human capital have remained adequate.
Reason (R): The resources allocated to human capital formation have been much less than the resources
required.
(A) Both Assertion (A) and Reason (R) are true and R is the correct explanation of Assertion (A.)
(B) Both Assertion (A) and Reason (R) are true but Reason (R) is NOT the correct explanation of
Assertion (A)
(C) Assertion (A) is true but Reason (R) is false.
(D) Assertion (A) is false but Reason (R) is true
23 28 Read the following Assertion(A) and Reason (R) and choose the correct alternatives given
below.
Assertion (A): ICMR regulates health sector in India
Reason (R): The full form of ICMR is international council of medical research.
(A) Both Assertion (A) and Reason (R) are true and R is the correct explanation of Assertion(A.)
(B) Both Assertion (A) and Reason (R) are true but Reason (R) is NOT the correct explanation of
Assertion (A)
(C) Assertion (A) is true but Reason (R) is false.
(D) Assertion (A) is false but Reason (R) is true
24 Assertion: Expenditure on information is considered an important source of human capital formation.
Reason: A person who is educated, trained and skilled can be unemployed due to lack of expenditure on
information.
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion
(A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanationof Assertion
(A).
c) Assertion (A) is true but Reason (R) is false.
d) Assertion (A) is false but Reason (R) is true

25 Assertion: Enrolment of girls’ students of poor family has increased considerably.

Reason: Various schemes have been initiated by the government in the promotion of education among
under privileged section of society.
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation ofAssertion
(A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanationof Assertion
(A).
c) Assertion (A) is true but Reason (R) is false.
d) Assertion (A) is false but Reason (R) is true

5|Page 8 October 2021,ZIET BHUBANESWAR

26 Assertion: Education creates a positive impact on career prospects of people by increasing their standard
of living and quality of life.
Reason: There is a downward trend in inequality world- wide with a rise in the average education level.
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation ofAssertion
(A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanationof Assertion
(A).
c) Assertion (A) is true but Reason (R) is false.
d) Assertion (A) is false but Reason (R) is true
27 Assertion: Rising population is a serious roadblock in the process of human capital formation in India.
Reason: Migration facilitates utilisation of human capital.
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
Assertion (A)
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanationof Assertion
(A).
c) Assertion (A) is true but Reason (R) is false.
d) Assertion (A) is false but Reason (R) is true
28 Read the following statements- Assertion (A) & Reason (R). Choose one of the correct alternatives
given below:
Assertion (A) :Expenditure regarding on-the-job training is a sources of human capital formation and
investment.
Reason ( R ) : The return of on-the – job training is in form of enhanced labour productivity which is
more than the cost of it.
(A) Both Assertion (A) & Reason (R) is true
(B) Both Assertion (A) & Reason (R ) is false
(C) Assertion (A) is true but Reason (R) is False
(D) Assertion (A) is False but reason (R) is true
29 Read the following statements- Assertion (A) & Reason (R). Choose one of the correct alternatives
given below:
Assertion (A) :The relation between human capital and economic growth flows in either directions.
Reason (R ) : High level of economic growth means more investment in human capital formation –
better schools , colleges, research institution , hospitals and high level of human capital like doctors ,
scientist , engineers , professors causes growth of income or vice versa
(A)Both Assertion (A) & Reason (R) is true
(B)Both Assertion (A) & Reason (R ) is false
(C)Assertion (A) is true but Reason (R) is False
(D)Assertion (A) is False but reason (R) is true
30 Read the following statements- Assertion (A) & Reason (R). Choose one of the correct alternatives
given below:
Assertion (A) Human capital aims at increasing the quality of life through better education and health
facilities whereas human development focuses on increasing the labour productivity through education
and health facilities
Reason (R ) : Both human capital and human development regards education and health as a medium of
increasing productivity
(A) Both Assertion (A) & Reason (R) is true
(B) Both Assertion (A) & Reason (R ) is false
(C)Assertion (A) is true but Reason (R) is False
(D)Assertion (A) is False but reason (R) is true

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31 Read the following statements- Assertion (A) & Reason (R). Choose one of the correct alternatives
given below:
Assertion (A): Human capital creates both private and social benefits
Reason (R ) : The benefits from a human capital not only flows to those who pay for it but also to the
society in general.
A) Both Assertion (A) & Reason (R) is true
(B) Both Assertion (A) & Reason (R ) is false
(C)Assertion (A) is true but Reason (R) is False
(D)Assertion (A) is False but reason (R) is true
32 Read the following statements- Assertion (A) & Reason (R). Choose one of the correct alternatives
given below:
Assertion (A): Immigration enhances the process of human capital formation whereas the emigration
hampers the process human capital formation.
Reason (R ) : There is loss of valuable human capital in case of emigration not in case of immigration.
(A) Both Assertion (A) & Reason (R) is true
(B) Both Assertion (A) & Reason (R ) is false
(C)Assertion (A) is true but Reason (R) is False
(D)Assertion (A) is False but reason (R) is true

ANSWER

1-B 2-A 3-A 4-A 5-B 6-B 7-C 8-A 9-B 10-D
11-A 12-A 13-B 14-B 15-A 16-B 17-A 18-C 19-D 20-A
21-B 22-D 23-C 24-A 25-A 26-B 27-B 28-A 29-A 30-B
31-A 32-B

PREPIRED BY : PGT ECONOMICS OF BHUBANESWAR, GUWAHATI,

KOLKATA, RANCHI, SILCHAR AND TINSIKIA REGION.
VETTED BY : GUWAHATI REGION

7|Page 8 October 2021,ZIET BHUBANESWAR