| Question | Distinguish between physical capital and human capital. |
| Chapter | Human Capital Formation |
| Class | Class 12 |
| Subject | Economics (Indian Economic Development) |
| Category | Indian Economic Development Class 12 Sandeep Garg Solutions |
Question – Distinguish between physical capital and human capital.
Answer –
| Physical Capital | Human capital |
| It refers to man-made means of production or all those inputs which are required for the production like machine, buildings, etc. | Human capital refers to stock of skill, ability, expertise, education and knowledge embedded in the people of a nation at a point of time. |
| It is tangible and can be sold in the market | It is intangible and cannot be sold in the market only the services of human capital are sold. |
| It is separable from its owner. | It is inseparable from its owner. |
| Depreciates over time due to continuous use or due to change in pattern of demand and technology. | It generally depreciates with aging but depreciation can be reduced with continuous investment in health and education. |
| It is completely mobile between countries | It is less mobile between countries as compared to physical capital |
| It creates only private benefit | It creates both private and social benefits |
| It represents productive capacity of a nation | Human capital is the cause behind physical capital. |
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