poverty and inequality

Question 1

Absolute Poverty

Answer 1

Incomes below $2 a day, can’t access the most basic life sustaining goods

Question 1

Relative Poverty

Answer 1

Income below given average of a country

Question 2

Causes of Poverty

Answer 2

Economic Growth

Question 3

Econ Growth

Answer 3

Poverty falls as GDP per capita increases, increased employment, increase in tax revenue to fund public services and benefits
BUT mostly leads to growing inequality as rich see faster income increases. Increases relative poverty, hence growth needs to be pro-poor

Question 4

Economic development

Answer 4

Increase in living standards means less poverty

Question 5

Govt Intervention

Answer 5

Progressive tax systems - higher tax for higher earners redistributes
Raise NMW

Question 6

Causes of Income Inequality

Answer 6

Income Levels
Non workers
Physical and financial wealth
Govt Policy and number of dependents

Question 7

Causes of Wealth Inequality

Answer 7

Income Levels - higher incomes to invest in wealth
Existing Wealth - wealth is income generating
Inheritance

Question 8

Reasons for Inequality

Answer 8

Quality of human capital
Minimum wage rates
Trade union strength
Social benefits
How progressive tax system is

Question 9

Lorenz Curve

Answer 9

Measures distribution of curve

Question 10

Diff between Abs and Relative poverty

Answer 10

Abs - lack basic necessities to live
Relactive - below the median
abs can decline whilst rel increases

Question 11

Factors of Abs Poverty

Answer 11

Lack of education - less skilled workforce earns less as they are less productive
Lack of healthcare - more time in hospital and less at work hence low productivity
Improvements only happen in the long term
Infrastructure