MCQs TERM-1 HUMAN CAPITAL FORMATION IN INDIA

MCQs HUMAN CAPITAL FORMATION INDIAN ECONOMIC DEVELOPMENT CHAPTER 5

1. Read the following statements – Assertion (A) and Reason (R) & Choose the correct option
Assertion (A) – An educated person is able to generate more income
Reason (R) – Labour skill of an educated person is more than that of an uneducated person
A. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B. Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C. Assertion (A) is true but Reason (R) is false.
D. Assertion (A) is false but Reason (R) is true

Ans. A

2. Consider the following statements about education and identify the incorrect statement
A. Education gives one a better social standing & pride
B. Education enables a person to make better choices in life
C. It provides knowledge to understand the changes taking place in society
D. Education is sought only as it confers higher earning capacity on people

Ans. D

*Availability of educated labour force facilitates adaptation of technologies

3. Fill in the blank
We need good _______ to produce other human capital
A. Human capital
B. Physical capital
C. Social capital
D. Infrastructure

Ans. A

Means we need good investment in human capital to produce more human capital out of human resources

*Human Capital Formation gives birth to innovation, invention and technological improvements

4. Read  following statements carefully and choose the correct alternatives given below:
Statement 1 – Investment in education is one of the main source of human capital
Statement 2 –Investment in health, on-the job training, migration & information are also the sources of human capital formation
A. Both the statements are false.
B. Statement 1 is true and Statement 2 is false
C. Statement 2 is true and Statement 1 is false
D. Both the statements are true

Ans. D

5. Consider the following statements:
I. Vaccination comes under preventive medicine
II. Spread of health literacy & clean drinking water  falls under curative medicine
III. Social medicine refers to medical intervention during illness
IV. Health expenditure increases the supply of healthy labour force
Which of the above is/are correct?
A. Only I
B. I,II,III & IV
C. I & IV only
D. IV only

Ans. C

*Spread of health literacy & clean drinking water & good sanitation  falls under social medicine

* Medical intervention during illness comes under curative medicine

6. Read  following statements carefully and choose the correct alternatives given below:
Statement 1 – Expenditure on on-the-job training is a source of physical capital formation , return is in the form of enhanced labour productivity
Statement 2 – On-the job training can be done by training the workers under skilled worker & by sending workers for off-campus training
A. Both the statements are false.
B. Statement 1 is true and Statement 2 is false
C. Statement 2 is true and Statement 1 is false
D. Both the statements are true

Ans. C

7. What is the reason for rural-urban migration in India?
A. Marriage
B. Disease
C. Unemployment
D. None

Ans. C

8. Read the following statements – Assertion (A) and Reason (R) & Choose the correct option
Assertion (A) – Expenditure on migration is also a source of human capital formation
Reason (R) – Enhanced earning in the new place outweigh the costs of migration
A. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B. Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C. Assertion (A) is true but Reason (R) is false.
D. Assertion (A) is false but Reason (R) is true

Ans. A

9.Read  following statements carefully and choose the correct alternatives given below:
Statement 1 – Expenditure incurred for acquiring information relating to the labour market & other markets is source of human capital formation
Statement 2 – Evidence to prove increase in human capital causes economic growth is not clear
A. Both the statements are false.
B. Statement 1 is true and Statement 2 is false
C. Statement 2 is true and Statement 1 is false
D. Both the statements are true

Ans. D

* Because of measurement problems , education measured in terms of years of schooling , teacher-pupil ratio may not reflect quality of education

10. Consider the following statements :
I. Physical capital formation is an economic & technical process
II. Human capital formation is partly a social process & partly a conscious decision of possessor of the human capital
III. Physical capital is intangible & Human capital is tangible
IV. The human capital is separable from its owner while physical capital is inseparable
Which of these statements is/are correct?
A. I & II
B. III & IV
C. I,III & IV
D. I,II,III,IV

Ans. A

11. Read  following statements carefully and choose the correct alternatives given below:
Statement 1 – Physical capital is completely mobile between countries with some exceptions
Statement 2 – Human capital is also perfectly mobile between countries
A. Both the statements are false.
B. Statement 1 is true and Statement 2 is false
C. Statement 2 is true and Statement 1 is false
D. Both the statements are true

Ans. B

*Physical capital formation can be built through imports but human capital formation can be done only through conscious policy formulation

12. Read the following statements – Assertion (A) and Reason (R) & Choose the correct option
Assertion (A) – Physical capital depreciates with time & technology makes it obsolete
Reason (R) – Physical capital creates only private benefit
A. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B. Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C. Assertion (A) is true but Reason (R) is false.
D. Assertion (A) is false but Reason (R) is true

Ans. B

*Human capital depreciates with time but can be reduced through investment in health & education

* Human capital creates both private & social benefits

13. Fill in the blanks
 The concept of _______ is the base for conceptualizing human capital
A. Human capital
B. Education
C. Health
D. Physical capital

Ans. D

14. Read the following statements – Assertion (A) and Reason (R) & Choose the correct option
Assertion (A) – Causality between human capital & economic growth flows in either direction
Reason (R) – Higher income causes building of high level of human capital  & vice versa, high level of human capital causes income growth
A. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B. Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C. Assertion (A) is true but Reason (R) is false.
D. Assertion (A) is false but Reason (R) is true

Ans. A

*It means there is a relation between human capital & economic growth they flow in either direction which means Higher-income causes the building of a high level of human capital  & vice versa, high level of human capital causes income growth

15. Which five year plan assigned human capital a key role in country’s development?
A. First
B. Seventh
C. Fifth
D. Tenth

Ans. B

16. Which one is not the part of human capital?
A. Doctors
B. Engineers
C. Unskilled labour
D. Tax consultants

Ans. C

17. Fill in the blank
__________states that the world is undergoing rapid changes in the knowledge landscape

Ans.  National Education Policy 2020

*This policy vision suggests how human capital formation in India will move its economy to a higher growth trajectory based on knowledge landscape.

18. Read  following statements carefully and choose the correct alternatives given below:
Statement 1 – The growing emergence of epidemics and pandemics will also call for collaborative research in infectious
disease management
Statement 2 – Development of vaccines and the resultant social issues heightens the need for multidisciplinary learning
A. Both the statements are false.
B. Statement 1 is true and Statement 2 is false
C. Statement 2 is true and Statement 1 is false
D. Both the statements are true

Ans.  D

19. Which industry has been showing an impressive record over the past two decades?
A. Manufacturing
B. Textile
C. Information & Technology
D. Petroleum

Ans. C

20. Read the following statements – Assertion (A) and Reason (R) & Choose the correct option
Assertion (A) – Human capital considers education and health as a means to increase labour productivity
Reason (R) – Human development is based on the idea that education & health are integral to human well being because when people have the ability to read & write & live a long healthy life they will be able to make other choices
A. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B. Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C. Assertion (A) is true but Reason (R) is false.
D. Assertion (A) is false but Reason (R) is true

Ans.B

21. Since independence, India has witnessed a considerable fall in the Infant Mortality Rate in India’ Identify which of the following may not be one of the reasons for the fall in the Infant Mortality Rate? (Choose the correct alternative)
A. Improvement in health facilities over the years
B. Improvement in educational standards over the years
C. Fall in standard of living of the population of the nation over the years
D. Technological expansion over the years

Ans. C

22. Read the following statements – Assertion (A) and Reason (R):
Assertion (A) – Human capital treats human beings as a means to an end (increase in productivity).
Reason(R) – Human Capital Formation decreases by way of investments in education and health.
From the given alternatives choose the correct one:
Alternatives:
A. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B. Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C. Assertion (A) is true but Reason (R) is false.
D. Assertion (A) is false but Reason (R) is true.

Ans. C

23. Ms. Ishita has started a new business venture, she intends to spend a huge amount towards ‘on-the-job training’ of her workers before putting them to work. It exhibits the right step in the direction of Human Capital Formation.
Spot which of the following does not directly contributes to the process of human capital formation by Ms. Ishita:-
A. Adds skills and expertise
B. Improves efficiency
C. Ensures gender equity
D. Increases output productivity

Ans. C

24. Read  following statements carefully and choose the correct alternatives given below:
Statement 1 – Government intervention is not essential in health & education
Statement 2 – The role of government in health & education is to ensure that the private providers of these services adhere to the standards stipulated by the government and charge the correct price.
A. Both the statements are false.
B. Statement 1 is true and Statement 2 is false
C. Statement 2 is true and Statement 1 is false
D. Both the statements are true

Ans. C

*Expenditures on both education and health are to be carried out simultaneously by all the three tiers of the government

25. Which of the following organization is not related to education sector?
A. National Council of Educational Research & Training
B. University Grants Commission
C. Indian Council of Medical Research
D. All India Council of Technical Education

Ans. C

26. Identify the incorrect statement:
A. Government expenditure in education is expressed as a percentage of total government expenditure
B. The percentage of ‘education expenditure of total government expenditure’ indicates the importance of education in the scheme of things before the government
C. The percentage of ‘education expenditure of GDP’ expresses how much of people’s income is being committed to the development of education
D. Higher education takes a major share of total education expenditure

Ans. D

*Elementary education takes a major share

*Expenditure per student’ in tertiary education is higher than that of elementary

27. Fill in the blank
______________(1964–66) had recommended that at least 6 per cent of GDP be spent on education
A. Kasturirangan Committee
B. Education Commission
C. Tapas Majumdar Committee
D. B.N. Shrikrishna Committee

Ans. B

*Tapas Majumdar Committee estimated an expenditure of around Rs 1.37 lakh crore over 10 years to bring all Indian children in the age group of 6-14 years under the purview of school education.

 28.Read  following statements carefully and choose the correct alternatives given below:
Statement 1 – In 2011, the Government of India enacted the Right of Children to Free and Compulsory Education Act
Statement 2 –Govt. of India also levy a 2% education cess for secondary education
A. Both the statements are false.
B. Both the statements are true
C. Statement 2 is true and Statement 1 is false
D. Statement 1 is true and Statement 2 is false

Ans. A

RTE enacted in 2009 & Govt. levies cess for elementary education

29. Read the following statements – Assertion (A) and Reason (R):
Assertion (A) – There is a positive development in gender equity , still the need to promote education for women in India is imminent
Reason(R) – Women education is important for improving their social status and to make favourable impact on fertility rate & health of women & children
From the given alternatives choose the correct one:
Alternatives:
A. Assertion (A) is true but Reason (R) is false.
B. Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
D. Assertion (A) is false but Reason (R) is true

Ans.  C

30. Match the following:

Ans. 1-c , 2-d , 3-a , 4-b

31. Consider the following statements & choose the correct option:
I. The Indian education pyramid is steep indicating lesser and lesser number of people reaching the higher education level
II. Level of unemployment amongst the youth is the highest
III. Vocationalisation of education refers to job oriented education
IV. Education for all is still a distant dream in India
A. I & II only
B. III & IV only
C. I,II,III & IV
D. None

Ans. C

32. As per Census 2011, literacy rate in India is about
A. 65%
B. 84%
C. 74%
D. 70%

Ans. C

33. Which of the following is a reason for poor human capital formation in India?
A. High population growth
B. Brain Drain
C. Insufficient resources
D. All of the above

Ans. D

34. Read the following statements carefully and choose the correct alternatives given below:
Statement 1 – School dropouts give way to child labour which is a loss to human capital
Statement 2 – Adequate education and training to farmers can raise productivity in farms
A. Both the statements are false.
B. Both the statements are true
C. Statement 2 is true and Statement 1 is false
D. Statement 1 is true and Statement 2 is false

Ans. B

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