Asked by Jaren Harth on Jul 16, 2024
Verified
How can the DVCs break out of the vicious circle of poverty?
Vicious Circle
A complex chain of events that reinforce themselves through a feedback loop, leading to a detrimental situation.
Poverty
A state or condition in which individuals or communities lack the financial resources and essentials for a minimum standard of living.
- Identify strategies for developing countries to break out of the vicious circle of poverty.
Verified Answer
AS
Angelique SmithJul 16, 2024
Final Answer :
Many economists think that the key to breaking out of the vicious circle of poverty is to increase the rate of capital accumulation and achieve an investment level of about 10 percent of national income. At the same time, the nation needs to keep its population constant or limited to some growth rate significantly below 2.5 percent so that real income per person can rise. If that occurs, then the possibility of a self-sustaining expansion of income, saving, investment, and productivity arises, ending the vicious circle of poverty and transforming it into a self-regenerating, beneficent circle of economic progress.
Learning Objectives
- Identify strategies for developing countries to break out of the vicious circle of poverty.
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