A country has 20 percent elderly population, but many of them are economically active. Which limitation of the traditional old-age dependency ratio does this reveal?

Correct answer: It simplifies reality by treating all elderly people as dependents

The traditional old-age dependency ratio is usually calculated from age groups. It commonly compares people above a chosen old-age threshold with the working-age population and assumes that everyone in the older group is economically dependent. This is a convenient statistical measure, but it does not show each person’s actual work, income or health condition.

In the situation described, many people aged 65 and above are still employed, self-employed or otherwise earning income. They may contribute taxes and support themselves, so counting all of them as dependents exaggerates the real economic burden. The ratio is therefore useful for broad comparison but limited as a complete measure of dependency. It does not treat children as elderly, double-count the population or measure only births. Hence, option A is correct.