4.2 Poverty And Inequality Flashcards

1
Q

What is absolute poverty?

A

Absolute poverty is a situation where individuals cannot afford to acquire the basic necessities for a health and safety existence

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2
Q

What is relative poverty?

A

Relative poverty is a situation where household income is a certain percentage less than the median household income in the economy

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3
Q

What is income inequality?

A

Income inequality refers to the unequal distribution of income to households

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4
Q

What is wealth inequality?

A

Wealth inequality referees to differences in the amount of assets that households own

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5
Q

What are the 2 main measures of income inequality?

A

Lorenz curve and the gini coefficient

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6
Q

What is the Lorenz curve?

A

The Lorenz curve is a visual representation of inequality that exists between households in an economy

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7
Q

What is the gini coefficient?

A

Measures the distribution of income in a population. The closer the value to 1 the worse income inequality

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8
Q

What is the formula for gini coefficient?

A

A/ A+B

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9
Q

What are the causes of inequality?

A
  1. Education, training and skills
  2. Trade unions
  3. Benefit system
  4. Pension payments
  5. Wage rates
  6. Employment legislation
  7. Tax structure
  8. Asset ownership
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