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Vicious Circle of Poverty quiz

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Termini in questo insieme (15)

  • What is the vicious circle of poverty?
    It is a cycle where being poor causes conditions that keep people poor, such as low income leading to low savings, low investment, and low productivity.
  • How does low per capita income contribute to the vicious circle of poverty?
    Low per capita income means people have little money, leading to low savings and low demand for goods and services.
  • Why does low savings in a country lead to low investment?
    With low savings, there is less money available for investment in physical and human capital, which limits economic growth.
  • What is the effect of low investment in physical and human capital on productivity?
    Low investment results in low productivity because there are fewer tools, equipment, and educated workers to increase output.
  • How does low productivity perpetuate poverty?
    Low productivity means people and the country earn less income, which keeps them trapped in poverty.
  • How does rapid population growth worsen the vicious circle of poverty?
    Rapid population growth lowers per capita income further, increasing the number of people affected by poverty.
  • What role does increasing capital goods play in breaking the vicious circle of poverty?
    Increasing capital goods boosts productivity and income, helping countries escape the cycle of poverty.
  • How can enforcing the rule of law help break the vicious circle of poverty?
    Enforcing the rule of law protects property rights, reducing investment risk and encouraging entrepreneurs to invest.
  • Why is building infrastructure important for developing countries?
    Building infrastructure like roads, schools, and transportation increases productivity and supports economic growth.
  • How does participating in global trade help developing countries?
    Global trade allows countries to sell products abroad and attract foreign investment, which can boost economic growth.
  • What is one way governments can control population growth to help break the poverty cycle?
    Governments can offer or educate citizens about birth control to slow population growth and reduce poverty pressure.
  • How can developed nations help developing countries break the vicious circle of poverty through trade?
    Developed nations can lower trade barriers, such as tariffs and quotas, to help developing countries export their goods.
  • What is the impact of admitting temporary workers from developing countries into developed nations?
    Temporary workers can send money back home, increasing their families' income, but may also choose to stay permanently.
  • How does foreign aid from developed countries assist developing nations?
    Foreign aid provides money, goods, food, and capital to support development and help break the poverty cycle.
  • Why might investors hesitate to invest in developing countries without the rule of law?
    Without the rule of law, investors fear their property may be seized or stolen, making investment risky.