Asked by Reshelle Ytuarte on Jul 15, 2024
Verified
The ________ hypothesis states that poor countries are unable to save and invest enough to accumulate capital stock that would help them grow.
A) vicious-circle-of-poverty
B) equitable investment
C) no-country-left-behind
D) global-redevelopment
Vicious-Circle-Of-Poverty
A self-perpetuating condition where low income leads to low savings and investment, resulting in continued poverty.
Capital Stock
The total amount of physical and financial assets owned by a firm or country.
Equitable Investment
Investing in a way that is fair and just, considering factors like social responsibility and ethical practices.
- Acquire an understanding of the theory surrounding the poverty trap and how it affects economic expansion.
Verified Answer
JD
Juliet dentehJul 17, 2024
Final Answer :
A
Explanation :
The vicious-circle-of-poverty hypothesis suggests that poor countries cannot save and invest sufficiently to accumulate the capital necessary for growth, trapping them in a cycle of poverty.
Learning Objectives
- Acquire an understanding of the theory surrounding the poverty trap and how it affects economic expansion.
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