Directions: Read the following excerpt from the e-text and answer the question below using the RACES method. As a reminder, you must use evidence from the provided text.

Question

What Are the Region's Economic Challenges?
Many countries, including Mexico, have made significant strides against difficult economic problems. Yet, severe challenges remain. Many people in Middle America live in poverty. Haiti is by far the poorest country, with a GDP per person of less than half that of the next poorest country, Honduras. In nearly every country in the region, many people live in poverty.
Poverty hurts an economy in several ways. First, the government has to use resources to help people living in poverty so that they can survive. Second, poverty limits educational opportunities. That holds back economic growth, because workers with little education or training are less productive than skilled workers.
Income inequality is a problem as well, with a growing gap between the rich and poor. The richest 20 percent of the population earn more than half of all the country's income in Costa Rica, the Dominican Republic, Guatemala, Honduras, Mexico, Nicaragua, and Panama.
Crime and corruption are another source of economic challenges for Mexico and many Central American countries. When corrupt government officials may demand payments as a condition for doing business, businesses may avoid creating jobs in that country.
Due to poverty and the illegal drug trade, the region has a high rate of crime, which also hurts the economy. In 2014, Honduras had the highest murder rate in the world. High crime rates also discourage investment. Businesses do not want to open offices or factories in a country if they think they will be robbed or face a risk of violence.
A lack of good infrastructure or networks of structures such as highways, clean water supplies, and electrical grids-also holds the region's economy back. If a business cannot count on reliable transportation to its customers or on clean water or electricity, then that business is not going to create jobs in a region.

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Question: How does poverty harm a country's economy? Use the RACES strategy in a summary.

Answer 1

RACES Response:

R: Poverty harms a country's economy in several significant ways.

A: One crucial way is that it forces governments to allocate resources to assist people living in poverty, which takes away funds that could be used for other development initiatives.

C: As mentioned in the excerpt, “the government has to use resources to help people living in poverty so that they can survive.” This diversion of funds can limit the government's ability to invest in infrastructure or education, which are essential for economic growth.

E: Additionally, poverty severely restricts educational opportunities. Workers who receive little education or training are less productive than their skilled counterparts, which stifles overall economic advancement. The text states, “poverty limits educational opportunities. That holds back economic growth, because workers with little education or training are less productive than skilled workers.”

S: Overall, the cycle of poverty can lead to a stagnant economy where low education levels and insufficient government resources hinder development and job creation.