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1. Individuals, firms, markets and market failure
1.7 The distribution of income and wealth: poverty and inequality
1.7.2 The problem of poverty
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What is absolute poverty measured by?
Fixed income threshold
Match the type of poverty with its focus:
Absolute Poverty ↔️ Meeting basic needs
Relative Poverty ↔️ Standard of living comparison
Relative poverty is linked to higher stress levels and mental health issues.
True
Relative poverty can lead to feelings of resentment and social
exclusion
What are the two main ways to measure poverty?
Absolute and relative
Discrimination can trap certain groups in poverty by restricting their access to education and jobs.
True
What does the term 'poverty' refer to?
Lack of basic necessities
Match the type of poverty with its focus:
Absolute poverty ↔️ Meeting basic needs
Relative poverty ↔️ Standard of living compared to others
Order the areas of society negatively impacted by poverty:
1️⃣ Health
2️⃣ Education
3️⃣ Crime
Desperation and social exclusion can drive individuals to engage in criminal
activities
Discrimination can restrict access to jobs and education, trapping individuals in
poverty
True
What is one social consequence of high income inequality?
Social unrest
The minimum wage aims to ensure that low-income individuals earn a livable
wage
The minimum wage ensures low-income individuals earn a livable
wage
The minimum wage aims to lift people out of absolute poverty.
True
What type of approach does the minimum wage use to reduce poverty?
Legally mandated hourly pay rate
Minimum wage and social welfare programs address poverty from the same angle.
False
What is one way NGOs provide direct assistance to impoverished communities?
Providing food and shelter
NGOs are often more flexible than
government
programs in addressing poverty.
True
Relative poverty is measured as a percentage of the median
income
What is one impact of poverty on health?
Higher rates of chronic illnesses
Why does unemployment contribute to poverty?
Loss of stable income
Addressing poverty requires policies that combat
discrimination
.
True
High unemployment rates, especially in disadvantaged areas, leave many people without a stable source of
income
Income inequality refers to the unequal distribution of income within a
population
Social unrest can arise from perceived unfairness and lack of opportunity due to income inequality.
True
What is one health-related consequence of income inequality?
Poorer health outcomes
What is the purpose of a minimum wage policy?
Ensure a livable income
Minimum wage and social welfare programs address poverty from the same angle.
False
Poverty
refers to the lack of access to basic necessities required for a minimum standard of
living
Relative poverty is measured as a percentage of the median income.
True
Absolute poverty leads to poorer health outcomes due to lack of access to adequate nutrition and
healthcare
What is one consequence of poverty on education?
Limited educational resources
Individuals in
absolute poverty
may turn to criminal activities to meet basic needs.
True
High unemployment rates can lead to poverty because people lack a stable source of
income
Why does lack of education contribute to poverty?
Fewer job opportunities
Relative poverty is typically measured as a percentage of the
median
Poverty often leads to higher dropout rates and lower educational
attainment
Poverty can lead to higher rates of chronic illnesses due to lack of
healthcare
True
What is one of the primary causes of poverty related to education?
Lack of quality education
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