The reason countries buy oil from other countries, even though that country already has oil, is for trade. It's all about comparative advantage and opportunity cost.
Population may be considered positive hindrance in the way of economic development of a country. Too much population is not good for economic development. Population can be a limiting factor to economic development because of the following reasons: Population reduces the Rate of Capital Formation: 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.
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. These factors are mainly responsible for stagnation in such economies. It reduces per Capita Availability of Capital: The large size of population also reduces per capita availability of capital in less developed countries.
This is true in respect of underdeveloped countries where capital is scarce and its supply is inelastic. A rapidly growing population leads to a progressive decline in the availability of capital per worker. This further leads to lower productivity and diminishing returns.
Adverse Effect on per Capital Income: Rapid growth of population directly effects per capita income in an economy. In a sense, so long as the rate of population growth is lower than the per capita income, rate of economic growth will rise but if population growth exceeds the rate of economic growth, usually found in the case of less developed countries, per capita income must fall.
Large Population creates the Problem of Unemployment: A fast growth in population means a large number of persons coming to the labour market for whom it may not be possible to provide employment.
In fact, in underdeveloped countries, the number of job seekers is expanding so fast that despite all efforts towards planned development, it has not been possible to provide employment to all. Unemployment, underemployment and disguised employment are common features in these countries.
The rapidly rising population makes it almost impossible for economically backward countries to solve their problem of unemployment.
Rapid Population Growth creates Food Problem: Increased population means more mouths to feed which, in turn, creates pressure upon available stock of food. This is the reason, the under-developed countries with rapid growing population are generally faced with a problem of food shortage.
Despite all their efforts for raising agricultural production, they are not able to feed their growing population. Food scarcity effects economic development in two respects. Firstly, inadequate supply of food leads to undernourishment of the people which lowers their productivity.The effects of population growth are varied and vast.
While population growth, of any species, may be beneficial to a certain extent, there may come a time when the number in the population exceeds the natural resources available to sustain it. This is referred to as overpopulation. The consequences of such an event are severe and major.
Effects of Population Growth on Environment This is not the latest jackpot prize, but billion is a very formidable number. It [It must refer to a specific word in the sentence or the reader can become confused.] is the population of the earth. Positive and negative effects of population growth on our society and environment.
Here, population growth refers to the increase in the number of individuals across the world. The Effect Of Population Growth On Solow Growth Model Words | 7 Pages.
The effect of population growth on Solow Growth model I. Introduction In order to study the economic growth, many economists had established a large number of economic growth model.
Population may be considered positive hindrance in the way of economic development of a country. In a ‘capital poor’ and technologically backward country, growth of population reduces output by lowering the per capita availability of capital.
Population growth is a threatening problem Due to density in the population, many go without food and other necessary elements in their life and poverty struggle continues on, poorer countries becoming poorer and richer countries becoming richer.