Explain the relationship between the use of human capital and level of development

Human capital refers to the knowledge, skill sets and motivation that people have, which provide economic value. Human capital realizes that not everyone has the same skill sets or knowledge and that quality of work can be improved by investing in people's education.

Economic growth is an increase in an economy's ability, compared to past periods, to produce goods and services. It can be measured by measuring the percentage in the real gross domestic product (GDP) of a country. For example, suppose a country increased its real GDP at an annual rate of 2.5%. This country is experiencing economic growth and has an increase in the value of all goods and services.

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