Important MCQs of Human Capital Formation Class 12

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Looking for Important MCQs (Multiple Choice Questions) of Human Capital Formation chapter of Indian Economic Development Book of Class 12 CBSE, ISC, and other State Boards.

We have compiled a good collection of important MCQs of chapter 5 of the Indian Economic Development (Indian Economy) Book of Class 12 Commerce

Multiple Choice Questions of Human Capital Formation chapter of Economics Class 12

Let’s Practice

Human Capital consists of :

a) Entire population
b) Workers
c) Entrepreneurs
d) Both workers and entrepreneurs

Ans – d)
Explanation:- Only workers and Entrepreneurs can take part in productive process.

A person becomes a human resource when he/she :

a) Is willing to work
b) Is able to work
c) Belongs to a particular age group
d) All the above

Ans – d)

Ans – d)
Explanation:- In entire population children and old age person is not the human resource. Only age group between 18 to 60 is the human resources. But in this age group also a human must be willing and able to work.

Human Capital formation means incurring expenditure on :

a) Education
b) Training
c) Health
d) Any one of the above

Ans – d)

Ans – d)
Explanation:-In order to make human resources into human capital. Expenditure on Education, training, health, migration and information is incurred.

The following activity leads to human capital formation :

a) Walking
b) Physical exercises
c) Yoga
d) Any one of the above

Ans – d)

Ans – d)
Explanation:- Activity that improve the overall health of human resource contributes to human capital formation

_________ five-year plan recognised the importance of Human capital.

a) Seventh
b) Third
c) Eight
d) Sixth

Ans – a)

Ans – a)
Explanation:- The seventh Five year plan says, “Human resources development has necessarity to be assigned a key role in any development strategy, particulary in a country with a large population.

Which of the following is an example of physical capital?

a) Machinery
b) Health of People
c) Building
d) Education and knowledge in people

Ans – a), c)

Ans – a), c)
Explanation:- Physcial capital are those assets which are used in production process by Human capital.

In India, which of the following organizations regulates the health sector?

a) ICMR
b) UGC
c) AICTE
d) None of these

Ans – a)
Explanation:- ICMR (Indian Council of Medical Research) regulates the health sector of India.

The expenditure by the government on education is expressed as:

a) Percentage of total government expenditure
b) Percentage of GDP
c) Percentage of National Income
d) Neither a) nor b)

Ans – a), b)

Ans – a), b)
Explanation:- The expenditure by the government on education is expressed as 1. Percentage of total government expenditure and percentage of GDP.

Which one of the following is an indicator of educational achievement in a country?

a) Youth Literacy Rate
b) Adult Literacy RAte
c) Primary Completion Rate
d) All of these

Ans – d)
Explanation:- Educational achievement in a country is indicator of three parameters 1. Youth Literacy Rate 2. Adult Literacy Rate 3. Primary completion Rate.

In the year ___________ Indian Government made free and compulsory education for age
group of 6 – 14 years.

a) 2001
b) 2009
c) 2003
d) 2007

Ans – b)

Ans – b)
Explanation:- In 2009, the government of India enacted the Right of Children to Free and Compulsory Education Act to make free education a fundamental right of children in the age group of 6 – 14 years.

Which one of the following is a reason for poor human capital formation in India?

a) Brain drain
b) Low growth of population
c) Insufficient resources
d) All of these

Ans – a), c)

Ans – a), c)
Explanation:- Intelligent people migrate to foreign countrys and india has insufficient resources to make human resources into human capital

_____________ refers to the stock of skill, ability, expertise, education, and knowledge embodied
in the people.

a) Human resource
b) Physical Capital
c) Human Capital
d) None of these

Ans – c)
Explanation:- Human capital refers to the human resources which have skills, ability and expertise to take part in productive process of an economy of a country.

Which of the following is a source of human capital formation?

a) Expenditure on infrastructure
b) Expenditure on education
c) Expenditure on the job training
d) All of these

Ans – b), c)
Explanation:-Expenditure on Education, training,health, migration and information is the source of human capital formation.

How much educational cess has been imposed by the government on all union taxes?

a) 1 percent
b) 2 percent
c) 4 percent
d) None of these

Ans – b)
Explanation:- Government has imporsed 2 percent education cess on all union taxes. this tax is used to fund the government expenditure on providing free education.

What is the full form of ICMR?

a) International Council of Medical Research
b) Indian Council of Medical Resources
c) International council of Medical Resources
d) Indian Council for Medical Research

Ans – d)
Explanation:- Indian Council for Medical Research.

Which one of the following is a major source of human capital formation in a country.

a) Expenditure on education
b) Expenditure on Infrastructure
c) Expenditure on Defense
d) None of these

Ans – a)
Explanation:- Expenditure on ecuation is the major source of human capital formation in a country.

Which one of the following organizations regulates the health sector in India? (Choose
the correct alternative)

a) ICMR
b) UGC
c) AICTE
d) RBI

Ans – a)
Explanation:- Indian Council Medical Research is the organisation that regulates the health sector in India.

_______________ is the main reason for rural-urban migration in India.

a) illiteracy
b) Unemployment
c) Inflation
d) Lack of infrastructure

Ans – b)
Explanation:- Unemployment is the main reason for rural urban migration in India.

Human capital considers education and health as a means to increase labour productivity,
whereas Human Development considers that they are necessary for human well-being. The given statement is

a) True
b) False
c) Partially true
d) Partially false

Ans – a)
Explanation:- Human capital refers to a skilled and able persons that take part in productive process. Human development however is a broad term that refers to overall human well being.

Which of the given factor can not be termed as physical input?

a) Machinery
b) Tools and Equipment
c) Knowledge
d) Computers and Electronics

Ans – c)
Explanation:- Physcial input refers to all intangible assets that are used in productive process. Knowledge is an intangible productive resources

________ Capital is completely mobile between countries.

a) Physical
b) Human
c) Both a) and b)
d) None of these

Ans – a)
Explanation:- Only Physical capital is completely and easily movable between countries.

_________ refers to the stock of skills, ability, expertise, education, and knowledge of a
nation at a particular point in time.

a) Human Knowledge
b) Human Capital
c) Human Development
d) None of the above

Ans – b)
Explanation:- Human capital are the human resources with skills ability expertise, education and knowledge.

Physical capital refers to _

a) Stock of tangible input of production
b) process of acquiring and increasing the number of people who have the skill
c) Share of the companies
d) All of the above

Ans – a)
Explanation:- Physical capital refers to the tangible input of prouduction i.e, machinery and land

Human capital brings about quantitive improvement in the labour force. The given statement
is

a) True
b) False
c) Partially True
d) Can’t comment

Ans – a)
Explanation:- Human capital formation converts human resources into labour force. Thus it brings about quantitative changes in labour force.

Which among the following is incorrect with regard to the positive aspect of human capital
formation?

a) Improves technical knowledge
b) Increases productivity
c) Changes the social outlook
d) Increases the cost of production

Ans – d)

The stock of ‘skill and expertise of a nation at a point of time is known as:

a) social infrastructure
b) Human capital
c) Physical capital
d) None of these

Ans – b)

Which of the following is the problem of human capital formation in India?

a) Brain drain
b) Low academic standards
c) Rising population
d) All of these

Ans – d)

The ability to read write is known as:

a) education
b) human capital
c) literacy
d) human development

Ans – c)

Which of the following organizations is engaged in designing text material up to the
senior secondary level?

a) UGC
b) AICTE
c) ICMR
d) NCERT

Ans – d)

The responsibility of direction and control of higher education is with:

a) Government of India
b) Department of Higher Education
c) University Grants Commission
d) None of these

Ans – c)

Who is responsible for the implementation of rules and regulations for technical education
in the country?

a) National Council of Educational Research and Training
b) University Grants Commission
c) All India Council of Technical Education
d) Indian Council for Medical Research

Ans – c)

As per census 2011, the literacy rate in rural India is about:

a) 74%
b) 85%
c) 69%
d) 60%

Ans – c)

Adult Female literacy in India in 2017-18 census:

a) 75%
b) 85%
c) 70%
d) 66%

Ans – d)

Human Capital Formation leads to:

a) Efficient utilization of inputs
b) increase in the stock of physical capital
c) increase in GDP Growth
d) both a) and c)

Ans – d)

People as a resource means _

a) country’s natural capital in terms of their existing productive skill
b) country’s human capital in terms of their existing productive skill
c) country’s overall capital in terms of their existing productive skill
d) country’s technical capital in terms of their existing productive skill

Ans – b)

Which of the following statement is correct?

a) Human capital and Human Development are the same thing
b) Human capital treats the human beings as means
c) Human capital is intangible whereas physical capital is tangible.
d) Physical capital can not be sold in the market.

Ans – b)

Medical intervention during illness can be categorized as which form of health expenditure?

a) Preventive medicine
b) Curative medicine
c) Social medicine
d) Any of the above

Ans – b)
Explanation:- Curative Medicines are used in the treatment of present discease..

Preventive medicine includes medical practices which are designed to avoid or avert
disease. The given statement is

a) True
b) False
c) Partially True
d) Can’t comment

Ans – a)
Explanation:- Preventive medicines are vaccines to avert the said diseases.

Which among the following is not the source of human capital transformation?

a) Health expenditure which directly increases the supply of labour force
b) Expenditure on the on the job training which increases labour productivity
c) Expenditure on migration in terms of better employment opportunities
d) Expenditure on building machines and factories

Ans – d)

Who among the following contributes to the national income of a country?

a) A worker in a factory
b) A software engineer working with reliance
c) A seasonal farmer in Punjab
d) All the above

Ans – d)

Which among the following factor(s) explain the positive impact of on-the-job training?

a) Encourages innovation
b) Enhances productivity
c) Promotes modern methods
d) All of the above

Ans – d)

People of _____________ age group are treated as a productive labour force.

a) 15 – 35
b) 60 – 70
c) 0 – 10
d) 15 – 60

Ans – d)

Demographic dividend refers to

a) Growth that can arise when the population has a large number of the working-age population
b) Growth that can arise when the population has a large number of the dependent population
c) A shift from agriculture to an industrial economy
d) None of the above

Ans – a)
Explanation:- Only workers and Entrepreneurs can take part in productive process.

Which of the given states respectively has the highest and lowest literacy rate in India?

a) Kerala and Bihar
b) Kerala and Punjab
c) Madhya Pradesh and Bihar
d) Karnataka and Punjab

Ans – a)
Explanation:- Only workers and Entrepreneurs can take part in productive process.

Physical capital is inseparable from its owners. The given statement is

a) True
b) False
c) Partially true
d) Partially false

Ans – b)

If ________Capital represents the production capacity of a nation, ______ capital is the cause that designs machines.

a) Human, physical
b) financial, human
c) Physical, human
d) Physical, financial

Ans – c)

Education Commission (1964 – 66) recommended ________ percent of GDP to be spent on education whereas the current level is________

a) 6% and 4.6% respectively
b) 5% and 3.8% respectively
c) 7% and 6% respectively
d) 6% and 5.8% respectively

Ans – a)

A high level of physical and human capital can lead to a higher level of __

a) Economic growth
b) Population
c) Inflation
d) Poverty

Ans – a)

World Bank in its report ‘India and the Knowledge Economy leveraging strengths and
opportunities advised India to make a transition to ____________

a) Knowledge economy
b) agrarian economy
c) industrial economy
d) a mix of the above three

Ans – a)

Improved health and education of the people in a country entails

a) Positive externality
b) Negative externality
c) Both a) and b)
d) None of the above

Ans – a)

Which among the following is the major problem faced by the human capital formation in
India?

a) Rising population
b) Rising prices
b) Rising unemployment
d) None of the above

Ans – a)

Investment in human capital contributes to growth by

a) Providing effective utilization of the physical capital
b) raises the level of both production and productivity
c) promotes innovations and creates the ability to apply new technologies
d) All of the above

Ans – d)

Which one is not part of human capital?

a) Doctors
b) Engineers
c) Unskilled labour
d) Chartered Accountants

Ans – c)
Explanation:-Human capital includes the people who have the skills, education, expertise, and experience, i.e, Doctors lawyers, engineers, chartered accountants, skilled labour etc.

__________ is based on the idea that education and health are integral to human well-being.

a) Capital development
b) Physical education
c) Human development
d) Economic development

Ans – c)
Explanation:-Expenditure on education and health are important sources of human capital formation. An educated person has greater skills and knowledge and a healthy person is more productive.

The main problems of human capital formation include (s)

a) rising population
b) high poverty
c) brain drain
d) All of the above

Ans – d)

The government’s initiatives to improve education in India include

a) Provision of cess
b) Right of Education
c) Promoting education
d) All of the above

Ans – d)
Explanation:- The Government of India has taken many initiatives to improve the level of education include, education cess on all union taxes, free education for children, promotion of primary, secondary and higher secondary levels of education.

Which of the following is/are the true statements.

a) Elementary education takes a major share of total education expenditure
b) Expenditure per student is higher on tertiary education as compared to elementary
education.
c) The share of higher education like colleges, polytechnics etc is the least,
d) All of the above

Ans – d)
Explanation:- In India, the government is spending more on elementary education but the share of expenditure is least on colleges and polytechnics, etc. per-student expenditure is higher for higher education.

Under Human capital formation, expenditure on health includes expenditure for

a) Preventive medicine
b) curative medicine
c) Social medicine
d) All of the above

Ans – d)

Under Human capital formation, on the job training includes

a) training within the office campus
b) off the job training
c) training outside the office campus
d) Both a) and c)

Ans – d)

Under Human capital formation, people migrate

a) from a rural area to an urban area
b) from an urban area to a rural area
c) from a foreign country to home country
d) All of the above

Ans – a)
Explanation:- People migrate from rural area to urban area or from home country to foreign country in search of better jobs and high salaries.

How human capital formation contributes to economic growth?

a) By stimulating innovation and inventions
b) By enabling human resources to understand changes in scientific advancement
c) Human capital formation is inversely related to economic growth
d) Both a) and b)

Ans – d)

Which body formulates and enforce rules and regulations related to technical and professional
education in India?

a) AICTE
b) UGC
c) NCERT
d) All of the above

Ans – a)
Explanation:- All India Council for Technical Education (AICTE) was set up in 1945 as a national body to promote and regulate the technical and professional education system.

As per education data, which of the following state has the highest literacy rate in India?

a) Delhi
b) Kerala
c) Mizoram
d) Goa

Ans – b)
Explanation:- In 2017, the most literate state is Kerala with 93.91%. The literacy rate is one of the keys to measure socio, economic progress.

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Anurag Pathak
Anurag Pathak is an academic teacher. He has been teaching Accountancy and Economics for CBSE students for the last 18 years. In his guidance, thousands of students have secured good marks in their board exams and legacy is still going on. You can subscribe his youtube channel and can download the Android & ios app for free lectures.
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