Friday, September 27, 2013

How do you get out of poverty?

Poverty, where it is prevalent, is in the form of a vicious circle. This is because poverty causes less expenditure, which means lesser revenue for firms, lesser production, and consequently low income and more poverty. A person can get out of poverty by increasing demand (In Economic context). This can be done by increasing credit supply in the economy. The government can undertake welfare schemes, capital investments (For injections in the economy), and can reduce Bank Rates and reserve ratios to increase credit supply in the economy. 

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