Poverty And Inequality

Question 1

What is absolute poverty?

Answer 1

Measures the number of people living below a certain income level needed to afford basic goods

Question 2

What is relative poverty?

Answer 2

When the level of income in a household is low compared to others - below 50% of national wage

Question 3

Measures of poverty (2)

Answer 3

1. The Lorenz curve- the further from the Lorenz curve you go the more inequality there is
2. The Gini Coefficient- measures inequality based on the Lorenz curve -
   A Gini coefficient of 0 is perfect equality
   A Gini coefficient of 1 is perfect inequality

Question 4

How absolute poverty can be averted? (2)

Answer 4

1. Reduced by economic growth- a small rise in wages can help a large proportion of people
2. Can be solved by a greater distribution of income

Question 5

How to absolute poverty occur? (4)

Answer 5

1. War
2. Corrupt government
3. Natural disasters
4. Geographical climate

Question 6

Causes of relative poverty/ inequality (4)

Answer 6

1. Inequality in wages and earnings growth - those with few skills struggle
2. Unemployment
3. Falling relative value of state benefits- pension benefits rising with inflation may fall behind real wages
4. Regressive tax- burden of tax on poor

Question 7

Wage inequality can occur because of– (4)

Answer 7

1. De-industrialisation- d increase for skilled labour
2. Globalisation put pressure on firms to cut costs
3. Growth in zero hour contracts
4. Decline in trade union