Question

Which of the following statements are true? I. Inward-oriented policies have generally increased productivity and growth in the countries that pursued them. II. A country’s human capital increases if its workers become better educated or healthier. III. A higher saving rate cannot increase the capital stock. IV. Investment from abroad is a way for poor countries to learn the advanced technologies developed and used in richer countries. A. I and II B. II and IV C. III and IV D. I and III

Answer 1

Answer: 2 and 4

Human capital refers to the skills and knowledge acquired by humans in order to perform a particular activity in an organisation. As people get more and more educated and healthier, a country's human capital increases which further leads to greater efficiency and economic growth.

When developed countries invest in poor countries, they bring in advanced technology with them in the poor countries which further helps the poor countries to learn and specialise in it.