Which of the following explains the vicious circle of poverty?
A) By investing in education and infrastructure at the same time, the country can overcome the problems of poverty.
B) Poverty arises out of the lack of investment, but they cannot invest because they are poor.
C) A nation can shift its production possibilities curve inward by shifting more resources into the production of capital goods.
D) A nation can shift its production possibilities curve outward by shifting more resources into the production of consumer goods.
E) There are dual economies in the world: Some are meant to be rich and others are meant to be poor.

Question

Quizplus · Accepted Answer

The vicious circle of poverty suggests that a lack of investment leads to poverty, but poverty also prevents investment from taking place, creating a cycle that is difficult to break. Option A, C, D, and E do not explain the vicious circle of poverty.

Which of the Following Explains the Vicious Circle of Poverty