At the first stage as suggested by Malthus, birth rates start mounting up in the presence of increasing death rates while the per capita income is thought to substantiate living. Stage two witnesses burgeoning population rates. Likewise, at the completion of stage two and at per capita income in a given period of time when population would have reached it’s maximum, birth rates would yet again decline. The Malthusian population trap would have thus reached a saturation point.
Similarly, the higher the level of per capita income, the higher would be the level of aggregate income. Therefore it is realize that countries having higher income per capita are capable of having a better investment stance as facilitated by better rates of saving (Todaro and Smith 310).
However, beyond a certain level of per capita income, the growth in aggregate income level is thought to reach a maximum level and then start declining due to the fact that resources are scarce and land is fixed as more individuals would be needed to work with the same limited number of resources available to them. Thus, as penned by Malthus, this is the time when ‘diminishing returns’ are observed.
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