ECONOMICS
ECONOMIC DEVELOPMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Vicious circle of poverty
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Rising mass consumption
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Growth of industries
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High rate of urbanization
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Detailed explanation-1: -The primary causes of underdevelopment are so intimately connected that they together form a circle which is vicious. Ragnar Nurkse explains that the vicious circle implies a circular constellation of forces tending to act and react upon one another in such a way as to keep a poor country in a state of poverty.
Detailed explanation-2: -According to the principle of vicious circle in UDCs’ level of income remains low which leads to low level of saving and investment. Low investment leads to low productivity which again leads to low income.
Detailed explanation-3: -Underdevelopment is low level of development characterized by low real per capita income, wide-spread poverty, lower level of literacy, low life expectancy and underutilisation of resources etc.
Detailed explanation-4: -This is known as the social drift pathway. So, poverty leads to poorer mental health – and vice versa – leading, in turn, to reduced opportunities for economic development and increasing the risk of lifelong poverty. Hence the vicious cycle.