From the supply-side perspective of the vicious circle of development theory, why does a country remain impoverished?

Multiple choice question for Theories of Economic Development. Select an option, then review the explanation below.

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The available technology is insufficient to achieve self-relianceIts past poverty prevented adequate saving and investmentThere is an excessive level of underemploymentResources are allocated inefficiently

Explanation

According to the supply side of the vicious circle theory, a country stays poor primarily because its historical poverty limited its capacity to save and invest, which in turn hampers economic growth and development.

Practice related questions from the same subject.

1.What is the fundamental distinction between capitalism and socialism?
2.According to Baran, what factors contribute to the underdevelopment of Asia, Africa, and Latin America?
3.What does the acronym OECD represent?
4.According to Rosenstein-Rodan, where does a significant indivisibility primarily exist?
5.What does the Vicious Circle theory suggest about poverty?

From the supply-side perspective of the vicious circle of development theory, why does a country remain impoverished?

Explanation

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