Y2 - Poverty and inequality Flashcards
1
Q
Define absolute poverty
A
The minimum amount of resources a person needs to survive
2
Q
Define relative poverty
A
When people lack the minimum amount of income needed to maintain average SoL in the country
3
Q
How can you measure relative poverty?
A
- Poverty line (40-70% of income)
PROBLEMS - Subjective, changes over time and not good for international comparisons
4
Q
What are causes of poverty change?
A
- Level of indebtedness
- Level of unemployment
- Health/education
- Access to public services and gov spending
- State of economy and real incomes
- Income distribution
5
Q
Define income and wealth
A
Income = money earned over time period (flow concept) Wealth = stock assets a person owns
6
Q
How can you measure inequality?
A
Lorenz curve
y-axis = cumulative % of income, x-axis = cumulative % population
7
Q
Define Gini coefficient
A
Numerical calculation of inequality based on Lorenz curve
- 0 = perfectly equal, 1 = perfectly inequal
G = A/(A + B) (x100 for %)
8
Q
What are the causes of inequality within a country?
A
- Globalisation (rich get richer)
- Education, training and skills
- Wage rate
- Strength of trade unions
- Employment protection
- Social benefits (JSA)
- Progressiveness of tax system
9
Q
What are the causes of inequality between countries?
A
- Natural resources
- Geography (landlocked)
- Political stability
- Macroeconomic policies/state of economy
- Level of FDI
- Trade liberalisation
10
Q
What is the Kuznets curve?
A
- Shows the relationship between inequality and income per capita
- When economy at early development stage = low inequality
11
Q
How does capitalism influence inequality?
A
- Split between owners of resources and workers
- Resource owners have more wealth and income than workers
MORE INEQUALITY
