poverty and inequality

Question 1

How does poverty have a long lasting affect on GCSEs?

Answer 1

There is a 25% gap between those who receive free school meals and their wealthier peers in terms of the number achieving 5 or more C-A* grades.

Question 2

What does material deprivation mean?

Answer 2

The inability to afford basics such as food and heating.

Question 3

How many children in total are forced to go without essentials (2019-2020)?

Answer 3

17 million, with an increase of 140,000 between 2019 and 2020.

Question 4

What effects can a child living in poverty experience?

Answer 4

• Higher infant mortality rate
• Low birthweight
• Risk of being overweight
• Not being breastfed
• Tooth decay
• Unintentional injury
• Teenage pregnancy
• Poor general + mental health

Question 5

How does the World Bank suggest poverty should be measured?

Answer 5

• Income
• Consumption
• Health
• Education
• Assets owned

Question 6

What global benchmarks for poverty are used?

Answer 6

• $1.25 per day is absolute poverty (17% of the global population)
• $2.50 per day is significant deprivation (40% of the global population)

Question 7

What does the Lorenz Curve show?

Answer 7

It is a graphical representation of income distribution in a population.
It plots the cumulative percentage of income received by the lowest to the highest earners.

The further the curve is from the line of equality distribution, the more inequality there is.

Question 8

What is the gini coefficient?

Answer 8

The area between the line of equality and the lorenz curve all divided by the entire area underneath the line of equality.

Question 9

What does a Gini Coefficient of 1 mean?

Answer 9

There’s a high level of inequality in income distribution.

Question 10

What does a Gini Coefficient of 0 mean?

Answer 10

There is a low level of inequality in income distribution.

Question 11

What is economic growth?

Answer 11

An increase in the production or economic goods + services in an economy.

Question 12

What is the difference between economic growth and economic development?

Answer 12

Economic development takes into account varied aspects of quality of life as well as economic well-being.

Question 13

What does HDI stand for and do?

Answer 13

It stands for Human Development Index and compares levels of development.

Question 14

What are the 3 equal components of HDI?

Answer 14

• Life expectancy at birth taken as an indicator of health
• Mean years of schooling for adults and expected years for children measures health
• Average real income at purchasing power partly indicates material standard of living

Question 15

What does a production possibility frontier show?

Answer 15

It’s a graph that shows all possible combinations of 2 goods or services that can be produced using available resources and technology.

Question 16

Who are the key economists in the financial aid debate?

Answer 16

• Jeffery Sachs (for aid)
• Thomas Dichter, William Easterly, Dambisa Moyo (against aid)

Question 17

Why does Jeffrey Sachs support financial aid to poorer countries?

Answer 17

He believes that it helps people out of the poverty trap and allows them to get onto the first step and into the global market economy to then flourish by themselves.

Question 18

Why do Thomas Dichter, William Easterly and Dambisa moyo not support financial aid to poorer countries?

Answer 18

Due to the lack of incentive it gives people in these countries to then work, and that it creates a culture of dependency upon the donor countries/organisations.

Question 19

Where are nearly 90% of children living in extreme poverty from?

Answer 19

Sub-saharan Africa and South Asia.

Question 20

What does absolute poverty mean?

Answer 20

Incomes are insufficient to provide basic necessities such as food, clothing and shelter.

Question 21

What does relative poverty mean?

Answer 21

Income is insufficient to allow people to participate fully in society.

Question 22

What does the poverty line indicate?

Answer 22

The income below which people are said to be poor.

Question 23

What external costs on society can poverty cause?

Answer 23

• Decreased life expectancy
• Increased child mortality
• Increase drug use
• Increased crime
• Increased homicide rates
• Mental issues
• Obesity

Question 24

What are some costs of poverty to individuals + families?

Answer 24

• Poor quality housing, possible homelessness
• Increased illness, lowered life expectancy
• Mental health problems
• Sense of being trapped in a hopeless situation

Question 25

What economic costs are there of poverty?

Answer 25

• Loss of output where unemployment is a problem
• Directs costs: benefits + social services
• Social issues such as shoplifting

Question 26

What are UK standards of measuring poverty?

Answer 26

• Exam results
• Family breakdown
• Drug + alcohol dependency

Question 27

What are the 2 measures of poverty?

Answer 27

• Human Development Index
• Lorenz curve and Gini coefficient

Question 28

How does FDI help reduce poverty?

Answer 28

It creates employment in the area where the businesses are set up, thus providing citizens with more income

Question 29

What are microfinance schemes?

Answer 29

This involves borrowing small amounts of money to fund new enterprises.

Question 30

How are monopolies linked to inequality?

Answer 30

Monopolies have the market power to exploit consumers by charging high prices, thus increasing profits for big firms but leaving consumers with less income as a result.

Question 31

How can government intervention help reduce wealth inequality?

Answer 31

By charging inheritance taxes, the upper class keep less of their wealth thus reducing the inequality gap.

Question 32

How could taxes become a poverty trap?

Answer 32

If income taxes are too high, workers may be demotivated to work longer hours as they know they’ll receive the same income once taxes are deducted.