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International Political Economy
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Question:
This vicious circle of poverty shows
Author: Angelie BayabanAnswer:
That income in underdeveloped countries is low. Low income leads to low savings. Low savings will naturally result in low investment, which will result in less production. Low production will generate low income. Low income will create low demand for goods. In other words, it will result in smaller markets (limited extent of markets). Thus, there will be no inducement to invest.
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