Which of the Following Describes the Vicious Circle of Poverty

question 119

Multiple Choice

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.

---

Definitions:

Factory Overhead Account

An account that accumulates all indirect costs associated with manufacturing operations, not directly tied to specific units.

Factory Overhead

All indirect costs associated with manufacturing, including utilities, maintenance, and management salaries, not directly tied to the production of goods.

Applied Overhead

The portion of overhead allocated to specific jobs or production units based on a predetermined rate, contributing to the total cost of production.

Actual Overhead

The real costs associated with manufacturing overhead that a company incurs, as opposed to budgeted or estimated overhead costs.