Factors Influencing Growth and Development (Edexcel A-Level Economics A): Flashcards

Terms of trade for primary products deteriorate long-term

Low income→low savings→low investment→low capital→low income

$s/k$ (savings rate ÷ capital-output ratio)

Insufficient domestic savings to finance needed investment

Shortage of foreign exchange to import capital goods

Domestic savings invested abroad instead of domestically

Relatively low, constraining rural incomes

Promoted exports to earn foreign exchange for capital goods

Little incentive to save, so firms can't obtain funds

About 35%