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Which of the following is / are the key concepts of ‘Signalling’ Theory a. Credential, not human…

Signalling theory explains how educational credentials convey information about a person's likely productivity to employers. Information asymmetry makes such signals useful,…

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Which of the following is / are the key concepts of ‘Signalling’ Theory
a. Credential, not human capital
b. Information Asymmetry
c. Education is a signal
d. Innate Productivity

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Answer and explanation

Correct answer A

Signalling theory explains how educational credentials convey information about a person's likely productivity to employers. Information asymmetry makes such signals useful, because employers cannot directly observe every applicant's underlying ability. Education can therefore indicate innate productivity without its signalling role depending on the creation of additional human capital.

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