The Fundamental Argument in the Essay on the Principle of Population

question 54

Multiple Choice

The fundamental argument in the Essay on the Principle of Population was that improvements in technology or increases in physical capital would lead to only temporary improvements in productivity because they would always be offset by:

• A) rising human capital demands.
• B) falling land values.
• C) the pressure of rising population and more workers on the supply of land.
• D) falling birthrates.

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Definitions:

Consumption

The use of goods and services by households, constituting a major part of the economy's total output.

Permanent Income Hypothesis

A theory proposed by Milton Friedman suggesting that an individual's consumer behavior is determined by their long-term income expectations rather than their current income.

Services

Intangible products offered to consumers and other businesses, such as banking, education, and healthcare, which unlike goods, are not physical objects.

Autonomous Consumption

The level of consumption expenditure that occurs when income is zero, reflecting the basic level of consumption necessary for survival.