Question

Suppose a country’s total output is growing 10 percent per year, but its population is growing 11 percent per year. What will happen to living standards?

1. Remain the same
2. Fall
3. Rise

Short answer

The correct answer is option (b): Fall.

Step-by-step solution

Living standards

The living standards refer to the level of income, services, and material well-being that are enjoyed by the people in the society. The living standards are important because it shows the quality of life that an individual does enjoy.

Explanation for the answer

The living standard will fall if the population growth exceeds the total output of a nation.When there is higher population growth, the country’s government won’t be able to produce enough what the society needs, and there occurs an imbalance in the supply and demand of resources.

The increased population growth also leads to an increase in unemployment level and poverty increases in the society. So when population growth exceeds the total output of a nation, it will also result in the decline of the living standard.