Introduction to Economics 2 Deneme Sınavı Sorusu #350013
Which of the followings is true as the result of high population growth?
higher steady state capital-labor ratio
|
higher output per worker
|
changes in the proportion of working population
|
higher consumption per worker |
lower consumption |
Thus, the model implies that a higher population growth means a lower steady state capital-labor ratio and hence, a lower output per worker and lower consumption per worker. Reducing population growth raises the consumption per worker according to the model. However, it also reduces the total output and consumption, affecting a nation’s ability to defend itself or influence world events. Also, the Solow model assumes that the proportion of the population of working age is fixed. If the reduction in population growth changes the proportion of the population at the working age dramatically, say dramatically reduces the working age population, then the policy to reduce population growth creates problems for the social security and health care systems, besides reducing per capita output.
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