Human capital formation concept

Human capital formation refers to the development of skills, knowledge, and capacities of people - not physical capital accumulation. Statement 1 is incorrect because human capital is not about accumulating more physical capital; it focuses on people's abilities. Statement 2 is correct - human capital formation specifically refers to increasing knowledge, skill levels, and capacities of people through education and training. Statement 3 is incorrect as it refers to tangible wealth/physical capital formation, not human capital. Statement 4 is correct - human capital represents intangible wealth embodied in people's abilities, knowledge, and skills. Education, health, and training investments are forms of intangible wealth that increase human capital. Therefore, statements 2 and 4 correctly describe human capital formation. > Human capital = Intangible wealth in people's knowledge & skills, not physical capital. Answer: (c).