Movement of the fast-growing Asian nations through the demographic transition may have had an impact on growth rates because it
A)reduced expenditures on health care.
B)reduced expenditures on pensions.
C)increased savings.
D)increased consumption relative to GDP.
E)increased the number of retired people.

Question

Quizplus · Accepted Answer

As fast-growing Asian nations transition from a high birth rate and high death rate to a lower birth rate and lower death rate, the proportion of the population who are working-age adults increases relative to the proportion who are dependent children and elderly. This demographic shift typically leads to higher savings rates, as working-age adults save for their future needs and the needs of their dependents. This increase in savings can contribute to higher economic growth rates, as it provides more resources for investment in productive capital.

Movement of the Fast-Growing Asian Nations Through the Demographic Transition