Poverty Flashcards
purchasing power parity
Purchasing power parity tells us how much of one currency is needed to purchase a basket of goods compared to another currency.
Absolute Poverty
Absolute poverty is being unable to afford the basic necessities such as food, clean water and shelter.
Absolute Poverty Measure
The World Bank measures it by looking at the number of people living on less than $1.90 a day.
Relative Poverty
Relative poverty is defined as earning less than a particular percentage of a country’s average income.
Relative Poverty Measure
In the UK, a person is in relative poverty if they earn less than 60% of the median UK income.
What type of poverty is it when is when someone has low purchasing power compared to the average person in their economy.
relative poverty
What level of daily income does an individual have to earn less than in order to be considered as being in absolute poverty?
Absolute poverty is being unable to afford the basic necessities such as food, clean water and shelter. The World Bank measures it by looking at the number of people living on less than $1.90 a day.
What is the likely impact of a worsening of the standard of education?
A fall in the standard of education may lead to a decrease in skills which will lower productivity and therefore reduce incomes. This can significantly increase absolute poverty.
Which of the following explains why aid might not actually help reduce poverty?
Some politicians are corrupt and may take aid money and use it for their own consumption. This can increase AD and cause demand-pull inflation. If those in poverty are on a fixed income, this inflation will actually end up decreasing their real income and making them even poorer!
