3.6: Inequality and redistribution

Question 1

define absolute poverty

Answer 1

measure of poverty that focuses on a fixed, minimum standard of livign necessary for basic survival

Question 2

define relative poverty

Answer 2

measure that considers a person’s income or resources in comparison to overall standard of living within their society

Question 3

threshold of absolute vs relative poverty

Answer 3

ABSOLUTE: specific threshold - basic needs like food etc
RELATIVE: depends on median income

Question 4

what are the measures of absolute poverty?

Answer 4

poverty line - specific income level below which individuals
basic needs approach - assesses whether individuals can afford essential goods and services
cost of basic needs - calculate cost of baskets of necessities and determine whether individuals can afford

Question 5

what are the measures of relative poverty?

Answer 5

income inequality indices - gini cofficient etc - higher values = higher inequality
percentiles - comparison of different percentiles
subjective measures - surveys and questionnaires

Question 6

what are the economic factors of causes of changes in poverty?

Answer 6

economic growth - increases in a country’s overall income and GDP can reduce absolute by providing more resources to meet basic needs
income inequality - rising inequality = rising relative poverty

Question 7

whare the social and demographic factors for