Low productivity Low per capita income Rapid population growth Low levels of investment in physical and human capital Low level Low level of saving of demand FIGURE 39W.3 The vicious circle of poverty. Low per capita incomes make it difficult for poor nations to save and invest, a condition that perpetuates low productivity and low incomes. Furthermore, rapid population growth may quickly absorb increases in per capita real income and thereby destroy the possibility of breaking out of the poverty circle.

Low productivity Low per capita income Rapid population growth Low levels of investment in physical and human capital Low level Low level of saving of demand FIGURE 39W.3 The vicious circle of poverty. Low per capita incomes make it difficult for poor nations to save and invest, a condition that perpetuates low productivity and low incomes. Furthermore, rapid population growth may quickly absorb increases in per capita real income and thereby destroy the possibility of breaking out of the poverty circle.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter20: Economic Growth

Section: Chapter Questions

Problem 12SCQ: Why dues productivity growth in high-income economies not slow down as it runs into diminishing...

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