Question : Statement 1: Human capital formation leads to an increase in unemployment rates.
Statement 2: Human capital formation reduces unemployment rates.
Option 1: Statement 1 is true, and statement 2 is true.
Option 2: Statement 1 is true, but statement 2 is false.
Option 3: Statement 1 is false, but statement 2 is true.
Option 4: Statement 1 is false, and statement 2 is false.
Correct Answer: Statement 1 is false, but statement 2 is true.
Solution : The correct option is (c) Statement 1 is false, but statement 2 is true.
Human capital formation, which refers to the development of knowledge, skills, and abilities in individuals, is generally associated with a reduction in unemployment rates. As individuals acquire education, training, and skills, they become more employable and are better equipped to meet the demands of the job market. Therefore, human capital formation tends to reduce unemployment rates rather than increase them.
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