Question

How can economic growth lead to poverty reduction ? Also give examples .

Answer 1

Dear Student,

When Economy grows the flow of goods and services in the economy increases, Thus the income of the Businesses operating in an economy increases owing to increase in revenue , So they trend to invest more and produce more to satisfy the increased demand of goods and services. For this they employee more and more people and when the people get employment the poverty decreases. And this cycle continues.

But if the growth rate of population is more than the rate of Economic growth then in such a situation the economic growth is does not lead to reduction in poverty.


Regards