Why does an increase in literacy rates often accompany an increase in per capita income?

• A. Higher literacy rates reduce government spending, resulting in increased per capita income.
• B. An increase in literacy rates leads to lower population growth, which automatically increases per capita income.
• C. Increased literacy rates cause inflation, which raises nominal income per capita.
• D. Higher literacy rates improve worker productivity, leading to greater economic output and higher incomes.

Answer: (D)

Verified step by step guidance

1. Understand the relationship between literacy rates and worker productivity: Higher literacy rates mean that more people have basic reading and writing skills, which enhances their ability to learn, adapt, and perform complex tasks.
2. Recognize that increased worker productivity leads to greater economic output: When workers are more productive, they can produce more goods and services in the same amount of time, which contributes to overall economic growth.
3. Connect economic output to per capita income: Economic output divided by the population gives per capita income, so as output increases due to higher productivity, per capita income tends to rise.
4. Consider that higher literacy also facilitates technological adoption and innovation: Literate workers can better understand and implement new technologies, further boosting productivity and income levels.
5. Conclude that the primary reason an increase in literacy rates often accompanies an increase in per capita income is because improved literacy enhances worker productivity, which drives economic growth and raises incomes.