Author Question: Capital flight refers to the fact that both human and financial capital (Read 131 times)

tnt_battle · **on:** Apr 19, 2019

Question 1

The vicious-circle-of-poverty hypothesis states that poor countries

◦ are unable to save and invest enough to accumulate capital stock that would help them grow.
◦ cannot develop because they lack the ability to educate their workers.
◦ cannot develop because their economic policies are ineffective.
◦ cannot develop because people don't consume due to lack of goods and services.

Question 2

Capital flight refers to the fact that both human and financial capital

◦ flow into developing countries to build much needed infrastructure.
◦ leave developing countries in search of a higher rate of return.
◦ leave developed countries in search of a higher rate of return.
◦ flow into developing countries to invest in risk free investments.

tuwy · **Reply #1 on:** Apr 19, 2019

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