Question

A falling dependency ratio can be a source of economic growth and prosperity. State how. 

Hint:

A falling dependency ratio is seen as a positive thing for an economy, provided that enough jobs are created.

Answer 1

A falling dependency ratio indicates a higher proportion of working people who are capable of contributing to the economy.
With a larger working population, there are more people who are able to generate income and are able to contribute to the government revenue through direct and indirect taxes.
Thus, a higher working-age population can boost productivity and lead to higher levels of savings, investments and consumption, which are good for the economy.