R - Poverty reduces the overall purchasing power of the population. When people do not have enough income to meet their basic needs, they are unable to afford goods and services. This leads to decreased demand, which in turn affects businesses and slows down economic growth.
A - Poverty limits human capital development. Lack of access to quality education, healthcare, and nutrition hinders the potential of individuals to contribute to the workforce. This results in a less skilled and less productive labor force, which further hampers economic development.
C - Poverty increases social inequalities. Poverty concentrates wealth in the hands of a few while leaving the majority with limited opportunities for upward mobility. This creates social unrest and instability, which can disrupt economic activities, discourage investment, and hinder long-term economic progress.
E - Poverty increases reliance on social assistance programs. Governments have to allocate significant resources to provide social safety nets for the impoverished population, redirecting funds that could otherwise be invested in infrastructure, education, or innovation. This slows down economic development and perpetuates the cycle of poverty.
S - Poverty leads to higher crime rates. Desperation for basic needs, such as food and shelter, can push individuals into criminal activities. This creates an unsafe environment, discouraging businesses, tourism, and foreign investments, which negatively impact the overall economy.
In conclusion, poverty harms a country's economy by reducing purchasing power, limiting human capital development, increasing social inequalities, draining government resources, and fostering higher crime rates.
Question: How does poverty harm a country's economy? using RACES way
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