Economics · Oct / Nov 2020 · Paper 12 · Question 24

In countries with absolute poverty, low incomes can start a process that keeps incomes low. What are the stages of this process?

1. Alow incomes → low consumption → low prices → low output → low incomes
2. Blow incomes → low government spending → high taxation → low employment → low incomes
3. Clow incomes → low investment → high profits → low dividends → low incomes
4. Dlow incomes → low saving → low investment → low productivity → low incomes

As printed in the paper