"Countries Are Poor Because They Cannot Afford to Save and Invest

question 3

Multiple Choice

"Countries are poor because they cannot afford to save and invest" is called the:

• A) vicious circle of poverty.
• B) savings-investment trap.
• C) LDC trap.
• D) cycle of insufficient credit.

---

Definitions:

Accounting Equation

The fundamental principle of accounting that states assets are equal to the sum of liabilities and owner's equity.

Creditor

An individual or institution to whom money is owed by the debtor or the borrower.

Cash Investment

Cash investment refers to funds invested into a business or market with the expectation of generating a financial return.

Accounting Equation

Represents the fundamental relationship in accounting: Assets = Liabilities + Equity, ensuring a balance in a company's financial statements.