Question : The "rate of return on education" refers to:
Option 1: The interest rate on student loans
Option 2: The increase in wages associated with higher education levels
Option 3: The cost of education compared to the benefits received
Option 4: The growth rate of educational institutions in a country
Correct Answer: The increase in wages associated with higher education levels
Solution : The correct answer is (b) The increase in wages associated with higher education levels.
It measures the financial benefit or return that individuals can expect to gain from investing in education. Higher levels of education typically lead to higher-paying jobs and better career prospects, resulting in an increased earning potential. Therefore, the rate of return on education is a measure of the economic advantages that individuals can obtain through acquiring more education and skills.
