Which of the following options best describes the primary cause of the per capita income decline?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. Increase in population growth.
- An increase in population growth can lead to a decline in per capita income because as the population grows, the available resources, such as employment opportunities, education, and healthcare, may not increase proportionally.
- This imbalance reduces the income that each individual can earn, leading to a decrease in per capita income. If the economy does not expand fast enough to support the growing population, it can result in lower living standards and reduced economic prosperity per person.