Rapid population growth strains resources in low-income countries

Steps:

• Identify factors that hinder economic growth, such as those increasing pressure on limited resources.
• Evaluate each option: surpluses, savings, and investment aid development, while population growth does not.
• Recall that economic development measures per capita income and living standards.
• Select the option where growth outpaces resources, limiting progress.

Why D is correct:

• Rapid population growth dilutes per capita GDP gains, as defined by the formula GDP per capita = total GDP / population, straining infrastructure, education, and healthcare in resource-scarce low-income countries.

Why the others are wrong:

• A: Balance of payments surpluses provide foreign reserves to fund imports and investments, supporting growth.
• B: High savings rates increase domestic investment and capital formation, accelerating economic development.
• C: Large inflows of foreign investment bring capital, technology, and jobs, boosting productivity and output.

Final answer: D