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ACCA Applied Knowledge · Business and Technology · Social and demographic factors

A country has a falling birth rate and rising life expectancy, so the proportion of people aged over 70 is increasing. Which of the following is the most likely consequence for businesses operating there?

The most likely consequence is increased demand for healthcare, leisure and retirement-related services. An ageing population has more elderly consumers, while fewer young workers enter the labour force and pressure on public health and pension spending rises, so the opposite effects are incorrect.

  1. AIncreased demand for healthcare, leisure and retirement-related servicesCorrect
  2. BA growing pool of young workers available to employers
  3. CReduced demand for pension and savings products
  4. DLower pressure on government spending on health and pensions

Explanation

An ageing population raises demand for healthcare, leisure and retirement services, and for pension and savings products. The labour pool of young workers shrinks, and government spending pressure increases, so the other options are the opposite of the likely effects.

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