4.2

Question 1

what is poverty

Answer 1

poverty is pronounced deprivation in well being it includes low incomes and the inability to quire the basic goods/services necessary for survival with dignity

Question 2

Absolute Poverty

Answer 2

occurs when people cannot obtain adequate resources (measured in terms of calories or nutrition) to support a min level of physical health

Question 3

Relative poverty

Answer 3

occurs when people do not enjoy a certain minimum level of living standard enjoyed by the population in s country

Question 4

The main causes of poverty

Answer 4

-environmental
-governance
-economics
-healthcare
-demographics
-social factors

Question 5

what are the environmental causes of poverty

Answer 5

-erosion
-desertification and overgrazing
-deforestation
-climate change
-drought and water crisis

Question 6

what are the governance causes of poverty

Answer 6

-lacking democracy in poor countries
-the governance effectiveness of gov
-weak rule of law
-poor management of resources revenues
-failure by gov to produce essential infrastructure
-poor access to affordable education
-high level of corruption

Question 7

what are the economic causes of poverty

Answer 7

-unemployment
-capital flight
-inflation
high levels of debt
-low growth rates
-economic inactivity
-unfair terms of trade
-high rental costs

Question 8

what are the health care causes of poverty

Answer 8

-poor access to affordable health care
-inadequate nutrition in childhood, disease, specifically diseases in poverty
-clinical depression
-substance abuse

Question 9

what are the demographics causes of poverty

Answer 9

-overpopulation
-lack of access to birth control methods
-under pop

Question 10

what are the social factors causes of poverty

Answer 10

-crime
-historical factors e.g. imperialism, colonialism
-lack of education
-war, including civil war, genocide
-individual beliefs, actions and choice

Question 11

polices to reduce Absolute poverty

Answer 11

-improving the infrastructure system
-education-greater spending on education and training can enable higher skilled workforce
-aid-from developed countries can be used to invest in better health care and education
-diversification-of economy away from agriculture to manufacturing
-encourage economic development

Question 12

policies to reduce relative poverty

Answer 12

-progressive tax (increasing tax threshold)
-benefits
-child benefits
-national min wage
-job seekers allowance
-reduce unemployment
-universal basic income

Question 13

Income is

Answer 13

Money paid to an individual or family

Wages
Profits
Rent
Benefits
Interest

Question 14

Wealth is

Answer 14

The value of assets owned by an individual or family

Savings
Property
Shares
Land
Other assets

Question 15

What are the causes of income inequality

Answer 15

-workers replaced by tech
-productivity
-skill levels
-globalisation- work moved abroad. Decreased income inequality globally. Increase income inequality in developed countries.
-Tax
-gov policies
-increased international trade

Question 16

Effects of income inequality

Answer 16

-changes in savings
-reduction in consumer spending
-increased incentives as you can earn more
-increased debts
-Decrease productivity amongst low paid workers

Question 17

The Lorenz curve

Answer 17

-represents how income is shared in an economy
-The amount of income for different percentage of population

Question 18

The Gini coefficient

Answer 18

-is a commonly used measure of income inequality that condenses the entire income distribution for a country into a single number between 0 and one:
The higher the number the greater degree of income inequality

Question 19

Quintile ratio

Answer 19

This is the ratio of the average income of the richest 20% of the population to the average income of the poorest 20% of the population

Question 20

Palma ratio

Answer 20

This is the ratio of the richest 10% of the population’s share of gross national income divided by the poorest 40%’s share

Question 21

Gini coefficient

Answer 21

A Gini index of 0 represents perfect equality, while an index of 100 implies perfect inequality.

Question 22

The Lorenz curve

Answer 22

The Lorenz Curve gives a visual interpretation of income or wealth inequality. It is used to plot cumulative share of income (or wealth) against cumulative share of population. The diagonal line in the graphic below shows a situation of perfect equality of income i.e. 50% of population has 50% of income. The further away from the diagonal line that the Lorenz curve lies, the greater the degree of inequality.

Question 23

The Kuznets Curve

Answer 23

The Kuznets Curve suggests that inequality often rises during a phase of rapid industrialisation and urbanization but there may come a point when increased welfare provision, progressive taxes and more balanced income growth across industries might lead to a fall in overall inequality at higher per capita incomes.

Question 24

what are the main pillars of a free market capitalist economic system

Answer 24

-private property
-self interest
-comp in markets
-price mechanism
-freedom of choice
-limited role of gov