Question

Which of the following is correct? An increase in the quantity of labor always leads to economic growth. Increased education adds to the stock of human capital, not unlike building factories adds to the stock of physical capital. A decrease in the productivity of labor leads to economic growth. Third World countries are rich in human capital.

Answer 1

Answer:

Increased education adds to the stock of human capital, not unlike building factories adds to the stock of physical capital.

Explanation:

Economic growth can be defined as a persistent increase in the real Gdp of a country overtime.

An increase in the quantity of labour doesn't always lead to economic growth.

An increase in the productivity of labor leads to economic growth.

Third world countries aren't usually rich in human capital. One of the measures of human capital is education. Education is usually deficient in third world countries.

Factors that lead to economic growth are :

1. Improvement in technology

2. Investment in physical capital.

3. Increased availability of natural resocurces.

4. Investment in human capital

I hope my answer helps you

Answer 2

Answer:

Increased education adds to the stock of human capital, not unlike building factories adds to the stock of physical capital.

Explanation:

An increase in human capital stock is important because it increases productivity, and higher productivity = higher economic growth rate.

The most efficient way to increase human capital stock is through education. That is why an increase in education is as important and relevant to human capital, as an increase in factories is important and relevant to physical capital. Both changes increase productivity.