Economic development in DVC often focuses on capital accumulation. Why?

What will be an ideal response?

First, the availability of capital goods affects labor productivity, which affects real incomes and the per capital standard of living. Most DVC are deficient in the tools, equipment, machinery, and factories that would make the workers more productive. Second, the natural resource base is often limited in DVC, which means that other resources such as capital goods will be needed to substitute as an avenue for economic growth. Third, there may be cumulative effects from capital accumulation because if capital accumulation increases output faster than the population grows, the savings generated from rising real incomes can be reinvested to generate more capital formation and more savings.