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Can poverty cause poverty?

In: Education, Welfare, Poverty [Edit categories]

Answer:

Purely in Economic context, yes, poverty can set off a vicious circle, culminating in even more poverty. It goes something like this :
Poverty > Less Income > Less Consumption > Low Consumption Expenditure > Low Revenue for firms > Lesser Production > Lesser Income for Factor Inputs > Poverty

Therefore, this vicious circle will keep on incrementing. This can be prevented by suitable injections of capital investment by governments to increase availability of credit in the economy.

First answer by Shantamgoyal123. Last edit by Shantamgoyal123. Contributor trust: 2 [recommend contributor ]. Question popularity: 1 [recommend question].

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