Author Question: Investment in human capital is very similar to investing in physical capital. True or false? Explain ... (Read 159 times)

jerry coleman · **on:** Jun 30, 2018

Investment in human capital is very similar to investing in physical capital. True or false? Explain your answer.

What will be an ideal response?

Question 2

The result of British currency policy after World War I

A) left the country with painfully high interest rates and unemployment for years.
B) left the country well positioned for the roaring twenties that followed.
C) gave the country a tremendous advantage when the Smoot-Hawley Act was passed in the U.S.
D) left the country at a tremendous disadvantage when the Smoot-Hawley Act was passed in the U.S.

Joy Chen · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

They are similar in the sense that rates of return can be calculated for each form of capital so one can compare these and make a choice as to which type of investment to undertake. Rates of return to education are provided in Table 8.1 . Of course, there is a market for physical capital where it can be bought/sold but no market for human capital.

Answer to Question 2

A