Question

If a firm is interested in improving their human capital, which are they most likely to consider? A) investing in new capital equipment B) increasing the capital to labor ratio C) replacing current workers with new hire D) investing in training and education for their workers

Answer 1

Answer:

The answer is Option D: Investing in the training and education for their workers.

Explanation:

When a firm looks to improve their human capital they want to improve the quality of the workers and their qualifications. Therefore, a firm who is looking to improve their human capital will likely spend more on training and education of their workers so that the staff gain better skills and feel accomplished or fulfilled by working for the firm. Replacing current workers is not a good general principle because there may be little loyalty on the part of new employees and not all new hires will turn into long-term employees, although a few new hires might help to bring new talent and revitalize the firm. It is better to value the knowledge of long-standing employees and to give them tools to improve their performance.