How does population affect the economic condition?
Population growth can affect both sides of the flow diagram. One is in production. Population is labor force. It will increase supply of labor which is a factor of production. Population with human capital are very important to increase production and income of the country. The other is in consumption. It will increase consumption and expand the size of the market. If the growth of population is faster than productivity, wage rate will decrease. Poverty and hunger can increase.
