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Stephanie Clark
on Nov 26, 2024

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Which of the following describes the vicious circle of poverty?

A) Government spending for public goods is inflationary, and this undermines incentives to save and invest.
B) Higher incomes increase consumption at the expense of capital accumulation, which causes income to fall.
C) Low per capita incomes cause low levels of saving and investment, which mean low productivity and therefore low incomes.
D) A growing national income increases the demand for money, which increases the interest rate and reduces investment.

Vicious Circle

A complex chain of events that reinforces itself through a feedback loop, often leading to a detrimental situation.

Per Capita Incomes

The mean income received by an individual in a specific region or nation.

Saving and Investment

Refers to the portion of income not spent on consumption but utilized for acquiring assets or depositing in financial instruments for future returns.

  • Analyze the idea of the perpetual cycle of poverty and investigate ways to resolve it.
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ashley dimasDec 01, 2024
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