All are true regarding Kwashiorkar except –
Megaloblastic anemia due to folic acid deficiency responds well to folic acid supplementation.

Associated nutritional deficiencies in PEM

Iron deficiency → Anemia (Microcytic hypochromic)
Folate & Vit B12 deficiency → Anemia (megaloblastic).
Vit A deficiency →  Xeropthalmia (Night blindness, conjuctival xerosis, 'Bitot's spot, corneal xerosis, keratomalacia).
Vit B2 deficiency → Ariboflavinosis. 
Vit C deficiency → Scurvy
Vit D deficiency → Skeletal changes of rickets may not be clinically overt as no growth is occurring during malnutrition (Rickets is a disease of growing skeleton). Rickets becomes evident during Dietary therapy, when skeleton starts growing again → Paradoxical rickets.
Fatty liver
Edema
Megaloblastic anemia not responding to folic acid
Bitot's spot