Question

True or false: the return on human capital accounts for a much larger share of u.s. national income than the return on physical capital.

a. True


b. False in market economies, investment funds are directed by . as a result, market economies tend to be characterized by a innovation and discovery process than centrally planned economies.

Answer 1

True

Step-by-step explanation:

Human capital are returns or value gain on set of skills, experience and knowledge of the people. When the skills and knowledge of the people are harnessed, it affects economic growth positively and also help to developing an economy.

Physical capital are goods which facilitate the process of production. Examples of physical capital are equipments, land, cash etc.

Although both are important in an economy, human capital accounts for a much larger share of the u.s national income than the return on physical capital because of the large investment in education, research and development and technology.

America account for most of the latest technologies in the world due to its investment in research and also home to larger numbers of investors. All these points to human capital development.