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:

Mental Process

The functions of the mind involving thinking, reasoning, perception, and memory.

Information Sorting

The process of categorizing or organizing data based on specific criteria or priorities.

Stereotyping

A cognitive process where individuals assign specific attributes to others based on their membership in a particular social group, often leading to oversimplified and inaccurate beliefs.

Feeling

An emotional state or reaction that reflects a person's internal emotional experience.