Correct Answer: It enhances productivity and innovation.

Solution : Human capital plays a crucial role in economic development by enhancing productivity and fostering innovation. Human capital refers to the knowledge, skills, abilities, and attributes that individuals possess and contribute to their productivity in the workforce. When individuals are equipped with education, training, and relevant skills, they become more productive and efficient in their work. This increased productivity leads to higher levels of output and economic growth. Additionally, human capital facilitates innovation by enabling individuals to develop new ideas, technologies, and processes that drive economic advancement. A skilled and knowledgeable workforce can contribute to the adoption and implementation of new technologies, leading to higher levels of economic productivity and development.