Correct Answer: Both assertion and reason are true, and the reason is the correct explanation of the assertion.

Solution : The correct answer is (a) Both assertion and reason are true, and the reason is the correct explanation of the assertion.

The assertion states that education is a fundamental component of human capital formation. Human capital refers to the knowledge, skills, and abilities possessed by individuals that contribute to their productivity and economic value. The reason provided is that education equips individuals with knowledge, critical thinking abilities, and transferable skills. This is true because education plays a vital role in developing human capital. It provides individuals with formal instruction, learning opportunities, and access to knowledge in various fields. Education enhances cognitive abilities, fosters critical thinking and problem-solving skills, and equips individuals with practical and transferable skills that are valuable in the labor market. Moreover, education contributes to personal development, social mobility, and the overall well-being of individuals and societies. Therefore, both the assertion and the reason are true, and the reason correctly explains the assertion.