Consider the following graph, which depicts the supply of and demand for human capital. The x-axis shows the level of investment in human capital (IHC) and the y-axis shows the rate of return (RoR) on human capital.
Suppose the U.S. Congress approves increased funding for community colleges. In this case, the of human capital will .
As a result, the level of investment in human capital will .
Now suppose that U.S. manufacturing becomes more heavily dependent on computers, which will require trained workers to operate computers. In this case, the for human capital will .
As a result, the level of investment in human capital will .