Answer to Question #265895 in Macroeconomics for rifad

Question

Explain with a diagram how a decrease in human capital can lead to detrimental results for economic growth (holding physical capital and technological progress constant)?

Answer 1

Human capital and economic growth have positive relationship to each other. A decrease in human capital will lead to decrease in economic growth due to under-utilization of resources in the economic. In the graph a decrease in human capital will shift to the left.