A poverty trap is a self-reinforcing mechanism that causes the poor to stay poor. This can happen in many ways, such as lack of access to education or healthcare, limited job opportunities, and inadequate infrastructure. These factors can make it very difficult for individuals and families to break out of poverty, which perpetuates the cycle.

Solved

A Poverty Trap Is

Question 118

Multiple Choice

A poverty trap is:

A) what develops when poor nations save "too much."
B) a self-reinforcing mechanism that causes the poor to stay poor.
C) what develops when nations devote too much to foreign aid and not enough to domestic poverty.
D) the lowest quartile of income earners in a given country, because it is highly unlikely they will ever move out regardless of policy.

Correct Answer: