Quiz 1

Question 1

Where do poverty traps stem from?

Answer 1

Biological mechanisms and inter-generational poverty

Question 2

Which of the following variables can be represented on a capacity curve’s y-axis?

Answer 2

Future income and work capacity

Question 3

Is it true that S-shaped curves always describe the relationship between income today and tomorrow in developing countries?

Answer 3

No, it depends on the returns to X today at various points on the X-axis

Question 4

What are the most likely reasons that savings might have lower returns for the poor than for the rich?

Answer 4

The poor can’t obtain access to bank accounts bc the bank asks for a high fee for maintenance. Secondly, the rich are more likely to be able to save enough to pay the fixed cost of their own business