Q. What is the impact on the “Social overhead capital requirements” of an economy, if the population increases?
Answer:
Social overhead capital requirements increase
Notes: Correct answer: Social overhead capital requirements increase. Social overhead capital refers to the essential infrastructure and services needed for economic activity, such as transportation, education, and healthcare. An increase in population typically leads to higher demand for these services, necessitating more investment in infrastructure. For instance, urban areas often require expanded public transport and housing, while schools and hospitals must accommodate more people. Historical examples include post-war baby booms leading to important infrastructure investments in countries like the U.S. and Japan.