Question

Give Reason
The dependency ratio of a country is of great importance to economists and government planners.​

Answer 1

Answer:

The dependency ratio is important because it shows the ratio of economically inactive compared to economically active. Economically active will pay much more income tax, corporation tax, and, to a lesser extent, more sales and VAT taxes.

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Answer 2

Answer:

The dependency ratio is an age-population ratio of those typically not in the labor force (the dependent part ages 0 to 14 and 65+) and those typically in the labor force (the productive part ages 15 to 64). It is used to measure the pressure on the productive population.

A low dependency ratio means that there are sufficient people working who can support the dependent population. A lower ratio could allow for better pensions and better health care for citizens. A higher ratio indicates more financial stress on working people and possible political instability.

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