State 2 negative effects of over population
Answers
Answer:
1. Population reduces the Rate of Capital Formation:
2.Higher Rate of Population requires more Investment:
Reason:
1. In underdeveloped countries, the composition of population is determined to increase capital formation. Due to higher birth rate and low expectation of life in these countries, the percentage of dependents is very high. Nearly 40 to 50 per cent of the population is in the non-productive age group which simply consumes and does not produce anything.
In underdeveloped countries, the composition of population is determined to increase capital formation. Due to higher birth rate and low expectation of life in these countries, the percentage of dependents is very high. Nearly 40 to 50 per cent of the population is in the non-productive age group which simply consumes and does not produce anything.In under developed countries, rapid growth of population diminishes the availability of capital per head which reduces the productivity of its labour force. Their income, as a consequence, is reduced and their capacity to save is diminished which, in turn, adversely affects capital formation.
2.
2. Higher Rate of Population requires more Investment:
2. Higher Rate of Population requires more Investment:In economically backward countries, investment requirements are beyond its investing capacity. A rapidly growing population increases the requirements of demographic investment which at the same time reduces the capacity of the people to save.
2. Higher Rate of Population requires more Investment:In economically backward countries, investment requirements are beyond its investing capacity. A rapidly growing population increases the requirements of demographic investment which at the same time reduces the capacity of the people to save.This creates a serious imbalance between investment requirements and the availability of investible funds. Therefore, the volume of such investment is determined by the rate of population growth in an economy. Some economists have estimated that for maintaining the present level of per capita income, 2 per cent to 5 per cent of national income must be invested if population grows at 1 per cent per annum.
2. Higher Rate of Population requires more Investment:In economically backward countries, investment requirements are beyond its investing capacity. A rapidly growing population increases the requirements of demographic investment which at the same time reduces the capacity of the people to save.This creates a serious imbalance between investment requirements and the availability of investible funds. Therefore, the volume of such investment is determined by the rate of population growth in an economy. Some economists have estimated that for maintaining the present level of per capita income, 2 per cent to 5 per cent of national income must be invested if population grows at 1 per cent per annum.In these countries, population is increasing at the rate of about 2.5 per cent per annum and 5 per cent to 12.5 per cent of their national income and hence the entire investment is absorbed by demographic investment and nothing is left for economic development. These factors are mainly responsible for stagnation in such economies.