5.3 Population

Everyone, including young and older workers, who lived on an island off Panama were relocated to the mainland in 2024. This occurred due to rising sea levels and repeated flooding, which the public good of sea defences could not prevent. People from some small island nations may need to move unless governments can reduce pollution which can cause rising sea levels. The effect on the living standards of those who move from countries with samll populations to countries with large populations is uncertain.

d) Discuss whether or not people who emigrate will always enjoy a higher living standard.

Street vendors mostly operate outside of the formal economy to avoid government regulation. However, many are now entering the formal economy. This has led to more government revenue, increased productivity and higher economic growth. Some governments plan to take measures to increase the number of firms in the economy.

b) Explain two effects of economic growth on a country's population. [4]

In 2023, India became the country with the largest population. This may affect the government's macroeconomic aims. In 2018, the Indian Government cut the country's corporation (corporate income) tax rate from 35% to 25%. Between 2019 and 2022, India's inflation rate averaged 6%. Some economists suggested that to achieve its central inflation rate target, the government should cut its spending.

b) Explain two reasons why a country may have a high population growth rate. [4]

Finland is a high-income country that usually has a higher value of exports than imports. It has a strong commercial banking sector which has increased its lending in recent years. The country has an ageing population, with more than a quarter of its population aged over 65. In 2022, Finland's Government had a budget deficit with government spending exceeding tax revenue.

c) Analyse how an ageing population may affect a country's economic growth rate. [6]

Hawaii's economy has grown due to tourism but the growth in this sector has also increased inflation in this US island state. It is estimated that 9% of Hawaii's population were living in poverty in 2022. Many families struggled to save. Young workers were able to leave due to high levels of labour mobility between US states. However, Hawaii is now facing an ageing population including many more retired people.

b) Explain the effects of an ageing population on spending and saving levels. [4]

Since 2016, South Korea's population has declined, due to a falling birth rate, and a high proportion of its population is now aged over 64. The South Korean government has used tax revenue to give cash incentives to couples to have more children. However, many parents have chosen to have fewer children and spend more on each child to ensure they get a good education. South Korea now has fewer but larger schools.

d) Discuss whether or not having a high proportion of a country's population over the age of 64 is a benefit to its economy. [8]

In 2020, Singapore experienced a decrease in both its population size and its labour force. 2020 was a year of great change in a number of Singaporean markets. Some moved from disequilibrium to equilibrium. Despite all these changes, Singapore managed to increase its exports of goods and services.

a) Identify two benefits of a decrease in a country's population size. [2]

Safiye Ali became the first female doctor in Turkey in 1923. By 2020, 40% of Turkish doctors were women. Over this period, labour productivity increased. Turkey also experience advances in technology, a change in the current account balance on its balance of payments and a significant increase in the size of population.

d) Discuss whether or not a country with a high population growth rate is likely to experience a high economic growth rate. [8]

Advances in technology have changed how trees (wood) are cut down, transported and used in the manufacture of furniture, such as tables. Wood is in inelastic supply. Wood can be supplied in all economic systems. However, public goods are not supplied in a market economic system.

d) Discuss whether or not advances in technology will benefit a country's population. [8]

Botswana's net migration varies. In 2019, Botswana had net immigration. Since 2010, its unemployment rate has averaged 18%. Between 2010 and 2019, the number of women in the labour force increased from 380000 to 490000. Although Botswana is one of Africa's richer countries, its households do not save much of their income.

a) Identify two reasons why immigration may increase. [2]

The Canadian government has introduced a number of policy measures designed to encourage more women to enter the labour force. Canada's labour force has reduced as its population has aged. The number of workers and their output are influenced by changes in the country's foreign exchange rate and consumer expenditure. In 2018, the Canadian dollar fell in value while Canadian consumer expenditure increased.

b) Explain two causes of an ageing population. [4]

Turkey's birth rate is falling which is likely to reduce its supply of labour. However, improvements in the quality of labour and the increase in foreign multinational companies (MNCs) operating in Turkey (the host country to the MNCs) may help the economy avoid a recession. One reason why economists are worried that a recession may occur is an expected rise in the interest rate.

a) Define birth rate. [2]

Russia's birth rate fell by 11% in 2017 to its lowest level for a decade. Over the next 30 years, Russia's population is forecast to fall from 144 million to 107 million. The government announced measures to reverse this decline in population. In 2017, it also announced privatisation plans and measures to reverse a decrease in investment which could lead to a fall in the quantity of capital goods. Privatisation can reduce monopoly power in a market.

b) Explain two causes of a fall in the birth rate. [4]

Japan has a low immigration rate and a declining population. In recent years, it has experienced deflation and a rise in child poverty. By 2017, one in six Japanese children lived in a household with less than half of the average household income. Japan operates a national minimum wage which increased every year between 2010 and 2017. This may have affected the level of poverty in the country.

a) State two benefits a country may gain from immigration. [2]

In 2017, the Japanese government announced improvements to its tax system. The amount of tax raised is influenced by the size and age distribution of a country's population. Japan's birth and death rates are falling, its population is ageing, and it has low immigration. Overall, Japan's population is decreasing.

b) Explain two causes of a decrease in the death rate. [4]

In 2017, the Japanese government announced improvements to its tax system. The amount of tax raised is influenced by the size and age distribution of a country's population. Japan's birth and death rates are falling, its population is ageing, and it has low immigration. Overall, Japan's population is decreasing.

d) Discuss whether or not an ageing population is a benefit to an economy. [8]

In Nagicho, a small town in Japan, a woman on average has 2.8 children in her lifetime. In Japan as a whole, a woman on average only has 1.4 children in her lifetime. Nagicho's higher birth rate is partly the result of a lower cost of living for families, as the prices of basic items are lower in Nagicho than in the rest of Japan. The local government not only offers housing at subsidised rates, to get more labour into the area, but also tries to get more investment into the town.

b) Explain how a lower cost of living can encourage population growth. [4]

Average life expectancy is as short for the poorest Americans as it is for the people of Sudan, a low-income African country. Low-income individuals tend to live longest in countries with more educated populations. Economic growth can increase education and reduce poverty. In 2017, the US President announced a cut in the tax on firms' profits. He said the measure would increase employment.

c) Identify two reasons why someone may want to migrate to the USA. [2]

African countries are expected to experience growth in their output. It is also predicted that Africa's population will increase from 1.1bn in 2017 to 4.2bn by 2100, when Nigeria will account for one in twelve of the world's births. Nigeria and South Africa are expected to experience the greatest rise in investment (spending on capital goods) over this period, and a change in their gender distribution.

a) Define gender distribution. [2]

c) Analyse the disadvantages of a rapidly growing population. [6]