Rather than pay Renato a high money wage,his employer gives Renato land to till for his own use.However,without a good wage,Renato does not have money to spend on manufactured goods,which then reduces the success of local small industry.What economic situation does this arrangement encourage in Renato's homeland?

Question

Quizplus · Accepted Answer

This arrangement encourages underdevelopment because it limits Renato's ability to participate in the broader economy by restricting his income to in-kind payments (land) rather than a monetary wage. This, in turn, reduces demand for local small industry products, potentially stifling economic growth and diversification.

Rather Than Pay Renato a High Money Wage,his Employer Gives