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What potential future issue is posed by declining birth and fertility rates?

  1. Increased youth unemployment

  2. Shortage of primary school teachers

  3. Imbalance in dependency ratio

  4. Higher tax rates for the working population

The correct answer is: Imbalance in dependency ratio

The potential future issue posed by declining birth and fertility rates is an imbalance in the dependency ratio. The dependency ratio refers to the ratio of dependents (people who are not in the labor force, typically the elderly and children) to the working-age population. As birth and fertility rates decline, there are fewer young people entering the workforce, which can lead to a higher proportion of elderly individuals relative to those who are working. This demographic shift can create economic challenges, as there will be more dependents relying on the working population for support, potentially leading to increased stress on social services and pension systems. The growing number of dependents could strain resources and require greater financial contributions from a shrinking workforce. This situation is compounded by the fact that as medical advancements improve life expectancy, the population of elderly individuals continues to increase, further exacerbating the imbalance in the dependency ratio. In contrast, options discussing youth unemployment or a shortage of primary school teachers are more immediate concerns related to demographic changes but do not directly illustrate the broader economic implications of declining birth rates as clearly as the dependency ratio does. Similarly, higher tax rates could be a consequence of an imbalanced dependency ratio but are not a direct issue stemming from declining birth and fertility rates themselves.