What is meant by human capital formation?
Human capital formation is the process of adding to the stock of human capital over time.
A professor earns a higher wage than a peon in the college. Why?
Because a professor has the skill or abilities to produce more whereas the peon in the college does not have this skill.
What do you mean by the term 'sources of human capital formation'?
Sources of human capital formation means the determinants of human capital formation.
Human capital formation is the process of adding to the stock of human capital over time.
Human stock formation = 25000-20000 = 5000.
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