Poverty and Inequality

Question 1

Define Relative and Absolute poverty

Answer 1

Relative: Below 60% of median income
Absolute: Below subsistence
$1.25 per day

Question 2

Explain the Gini coefficient

Answer 2

0<x<1, 1 is complete inequality, and 0 is complete equality

Question 3

Graph and explain the Lorenz curve

Answer 3

The Lorenz curve represents the distribution of incomes within a country.

Question 4

List Policies to reduce inequality and poverty

Answer 4

• Progressive taxation
• higher welfare
• Taxes on inheritance/levied on wealth
• Higher spending on eucation, halthcare, infrastructure in impoverished areas