Economic Problems of Developing Countries
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- Subject
- Economic Problems of Developing Countrieseconomics-mcqs › economic-problems-of-developing-countries
- Published
- 2 Jun 2019
- Last updated
- 28 May 2026
Which concept explains that poverty continues because poor countries cannot save or invest sufficiently to build the capital necessary for economic growth?
Multiple choice question for Economic Problems of Developing Countries. Select an option, then review the explanation below.
Explanation
The vicious circle of poverty hypothesis states that poor nations remain trapped in poverty as their low income prevents them from saving and investing enough to develop the capital stock needed for growth. Other theories like dependency theory, neo-colonialism, and under-consumption focus on different aspects of economic challenges but do not specifically address this self-reinforcing cycle.
More Economic Problems of Developing Countries MCQs
Practice related questions from the same subject.
- 1.What is the term for an arrangement between a borrowing nation and the International Monetary Fund where the country commits to reform its economic policies to encourage increased exports and reduce imports?
- 2.What do structuralist economists primarily examine when analyzing developing nations?
- 3.Which issue is generally NOT a challenge encountered by the majority of developing countries?
- 4.Which policy has proven to be the most effective in boosting agricultural production in developing nations?
- 5.What is one advantage of investing in agricultural initiatives?