Question
Differentiate between physical capital and human capital.
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S. No.
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Basis
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Physical Capital
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Human Capital
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1.
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Nature
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It is tangible and can be easily sold in the market like any other commodity
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It is intangible; built in the body and mind of its owner. It is not sold in the market, only its services are sold.
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2.
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Ownership
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It is completely mobile between countries except some artificial trade restrictions
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It is inseparable from its owner.
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3.
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Mobility
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It is separable from its owner.
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It is not perfectly mobile between countries as movement is restricted by nationality and culture.
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4.
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Formation
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It can be built even through imports.
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It is to be done through conscious policy formulations.
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5.
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Benefit
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It creates only private benefit.
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It creates private and social benefits.
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6.
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Depreciation
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It is subject to depreciation, which is unavoidable.
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It is also subject to depreciation, but it could be avoided by expenditure on education and health.
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