4.2.1-4.2.2 poverty and inequality

Question 1

absolute poverty definition

Answer 1

situation where individuals cannot afford to acquire the basic necessities for a healthy and safe existence

Question 2

Basic necessities

Answer 2

shelter
water
nutrition
clothing
healthcare

Question 3

in 2022 the world bank defined absolute poverty as

Answer 3

someone who is living on less than 1.90 dollars a day

Question 4

relative poverty definition

Answer 4

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

Question 5

median uk monthly household income in 2022

Answer 5

2072 pounds per month

Question 6

type of poverty in developed and developing countries

Answer 6

developed - relative poverty
developing- absolute poverty

Question 7

absolute poverty after 1990

Answer 7

significantly decreases

Question 8

can absolute poverty decrease when income inequality increases

Answer 8

yes

Question 9

A reduction in absolute and relative poverty requires the benefits of

Answer 9

free market and government intervention

Question 10

causes of changes in absolute poverty

Answer 10

-increase economic growth
-government tax and benefit policies

Question 11

causes of changes in relative poverty

Answer 11

-rising asset prices
-trade liberalization
-decreased levels of government benefits

Question 12

how does Rising asset prices can decrease relative poverty

Answer 12

Asset prices often increase faster than wages or income

Question 13

how does trade liberalization change relative poverty

Answer 13

increases potential market size and output of economy
increase demand for labour and wage rises
creates additional income and multiplier effect pulls households out of relative poverty

Question 14

trade liberalization definition

Answer 14

removing barriers to international trade

Question 15

how does decreased level of gov benefits affect relative poverty

Answer 15

lower household income and increase relative poverty

Question 16

Income inequality definition

Answer 16

refers to the unequal distribution of income to households rent, wages, interest and profit

Question 17

Wealth inequality definition

Answer 17

refers to differences in the amount of assets that households own

Question 18

The two main measures of income inequality

Answer 18

the Lorenz Curve and the Gini coefficient

Question 19

what is The Lorenz Curve

Answer 19

a visual representation of the inequality that exists between households in an economy

Question 20

quintiles

Answer 20

population divided into 5 groups i.e 20%

Question 21

deciles

Answer 21

population divided into 10 groups i.e 10%

Question 22

Perfect income distribution definition and is it desires

Answer 22

all individuals in a society receive the same income
no not desired because it would remove incentive to work

Question 23

is more equal income distribution desired

Answer 23

no it reduces poverty and social unrest