4.2.1 Poverty

Question 1

4.2.1a
Define Absolute poverty

Answer 1

People cannot afford basic necessities
Common in LDC

Question 2

4.2.1a
Define Relative poverty

Answer 2

Ppl earn much less than others in an economy
Occurs wherever inequality is present

Question 3

4.2.1b
Measures of absolute poverty

Answer 3

UN : <$1.25/d
↑ Malnutrition

Question 4

4.2.1b
Measures of relative poverty

Answer 4

UK/EU : <60% median income
Inability to afford ‘socially acceptable’ goods e.g internet / fridge

Question 5

4,2.1c
Causes of Changes in Poverty

Answer 5

1. Free Market Systems
2. Employment
3. Education & Training
4. Healthcare
5. Inheritance / Cycle of Poverty
6. Infrastructure (Social Capital)
7. Taxation

Question 6

4,2.1c
Causes of Changes in Poverty : Free Market Systems

Answer 6

• Price mechanism → allocates goods based on ability to pay
• If prices ↑ for essentials (e.g. healthcare, education) → ↓ access → ↑ poverty
• Creates a vicious cycle: lack of necessities → can’t earn income → remain poor

Question 7

4,2.1c
Causes of Changes in Poverty : Employment

Answer 7

• ↓ Jobs → ↓ income → ↑ poverty
• ↑ Job creation → ↑ income + ↑ output → ↓ poverty
• No welfare state (e.g. in LDCs) → no safety net → poverty ↑ when jobless

Question 8

4,2.1c
Causes of Changes in Poverty : Education & Training

Answer 8

• ↓ Education → ↓ skills → ↓ job prospects → ↓ income → ↑ poverty
• ↑ Education → ↑ employability → ↑ wages → ↑ ability to afford necessities → ↓ poverty

Question 9

4,2.1c
Causes of Changes in Poverty : Healthcare

Answer 9

• Ill health → ↓ ability to work → ↓ income → ↑ risk of absolute poverty
• No public healthcare (e.g. no NHS) → private care → ↑ costs → trade-offs (food vs medicine)

Question 10

4,2.1c
Causes of Changes in Poverty : Inheritance / Cycle of Poverty

Answer 10

• Born poor → ↓ access to education & healthcare → stay poor → children stay poor
• In LDCs: entire economy may lack basic services → few chances to escape poverty

Question 11

4,2.1c
Causes of Changes in Poverty : Infrastructure

Answer 11

• ↓ Roads, schools, hospitals → ↓ employment + ↓ access to services → ↑ poverty
• ↑ Infrastructure → ↑ jobs + ↑ access to healthcare/education → ↓ poverty long-term

Question 12

4,2.1c
Causes of Changes in Poverty : Taxation

Answer 12

• Regressive tax → takes more % from low incomes → ↑ poverty
• ↑ Tax overall → ↓ disposable income → ↓ incentives to work → ↑ unemployment → ↑ poverty
• Bad tax policy can trap people in low income