The vicious cycle of poverty in developing countries is best illustrated by which of the following sequences?

Question

Accepted Answer

Low income → low savings → low investment → low productivity → low income. The vicious cycle of poverty, as described by Ragnar Nurkse, follows the sequence: low income leads to low savings capacity, which results in low capital formation (investment), leading to low productivity and output, which in turn perpetuates low income. This self-reinforcing cycle traps developing

Answer

A) Low income → high savings → low investment → low productivity → low income

Answer

B) Low income → low savings → low investment → low productivity → low income

Answer

C) High income → low savings → high investment → low productivity → low income

Answer

D) Low income → high investment → low savings → high productivity → low income

The vicious cycle of poverty in developing countries is best illustrated by which of the following sequences?

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