Which of the Following Describes the Vicious Circle of Poverty

question 206

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.

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Definitions:

Units

The measures or quantities of a product, service, or resource, which are accounted for in business transactions.

Activity Variance

The difference between the actual cost incurred for an activity and the expected cost, based on the budgeted or standard amount.

Direct Labor

The wages paid to workers who are directly involved in the production of goods or the provision of services.

Units

Units typically refer to the individual items or quantities of a product or service produced or sold by a business.