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 KCSE business studies paper 2 revision questions and answers set 6

Country Z’s population has been growing at 4% per annum while her economy has growing at less than 3% per annum. Explain five economic consequences ot the above trend to country Z.

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Answer Text:
-Umployment problems since it will not be able to cope with employment
-Reduced income per capita or high dependence ratio.
-Diversion of government expenditure from development to non-productive expenditures.
-Pressure on available resources like housing,health and educational facilities which leads to decline in their qualities.
-Consumption will increase and will result in reduced savings and investments.
-There will be be some problems in balance of payments as imports will tend to outstrip exports