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CA Foundation · Business Economics · Indian Economy

A country's population has a high proportion of persons in the working age group (15-59 years) and a falling dependency ratio. This situation, which can raise growth if productive jobs are created, is known as:

This is called the demographic dividend. It occurs when the working-age population share rises and the dependency ratio falls, giving a potential boost to savings, labour supply and growth, provided that enough productive jobs and skills are available for the workforce.

  1. ADemographic dividendCorrect
  2. BDemographic transition trap
  3. CPopulation explosion
  4. DDependency burden

Explanation

A demographic dividend arises when the share of working-age population is large relative to dependents, raising savings and output potential if employment and skills are available. A population explosion refers to rapid total growth, and a dependency burden is the opposite situation of a high dependency ratio.

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