In the world of Malthus, real GDP per person eventually stops growing. The primary reason for the decrease in economic growth is that

Question

Quizplus · Accepted Answer

According to Malthus, the population grows faster than the food supply, leading to diminishing returns to labor and ultimately driving the real wage back to the subsistence level. This results in a decrease in economic growth as there are no further gains to be made from increasing labor input. Therefore, option B is the correct answer. Option A is incorrect because savings are important for investment in Malthusian theory. Option C is irrelevant as it was not a factor in Malthus' time. Option D is also incorrect as rising wage rates would, in fact, motivate workers to increase labor productivity.

In the World of Malthus, Real GDP Per Person Eventually