In the context of development, the 'Poverty Trap' refers to:
A. A self-reinforcing mechanism that causes poverty to persist
B. A situation that always disappears automatically
C. A temporary decline in income
D. Only the absence of foreign aid
Answer: Option A
Solution (By JKSSB Mock Tests)
A poverty trap is a self-perpetuating condition in which an economy or household remains poor because the existing level of poverty itself prevents the accumulation of capital or adoption of better technologies.
Explanation:
Monopsony refers to a market with a single buyer. While monopsony is a market structure, the option 'Monopsony of labour only' incorrectly restricts it. Standard market structures are perfect competition, monopoly, monopolistic competition and oligopoly.
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