Answer to Question #302705 in Management for Ann

Question

How applied economics solved poverty without causing loss of economic incentives?

Answer 1

Economic growth is the most effective tool for reducing poverty and raising living standards in developing countries. Growth can create virtuous circles of prosperity and opportunity. For instance, p arents are more likely to invest in their children's education when there are more job opportunities available. By sending them to school, you can provide them with an education. This may lead to the emergence of a strong and a growing number of entrepreneurs, which should put pressure on the government to improve the situation governance. Strong economic growth promotes human development, which, in turn, benefits the environment. As a result, economic growth is boosted. The degree to which the poor participate in the growth process and share in its benefits determines the extent to which growth reduces poverty without causing loss of economic incentives.