ECON EXAM

• Absolute poverty


  Levels of incomes and expenditures that fall below a level, popularly known as the "poverty line," nominal value of which is adjusted to hold a fixed value of its purchasing power
• Relative poverty


  Comparison of the incomes and expenditures of the poor with reference to the rich or of some other groups
• Extreme poverty


  Characterized by those disadvantaged in basic living conditions, such as food, clean water, sanitation, housing, good health, and even to information
• Poverty rate


  The most common measure of poverty
• Poverty line


  Set by the government as the threshold to which the absolute value of income and expenses is compared to consider a family to be in poverty
• Subsistence incidence


  Further classification of the part below the poverty line suffering from extreme hunger
• Two major types of inequality

  • Wealth inequality
  • Income inequality
• Expenditure based


  Considered to be more in line with the economic theory that is more relative to household wellbeing
• Perfect equality of income distribution is graph with the line of quality – 45 degree
• Poverty incidence (PI)


  Percentage of families or individuals with per capita income or expenditure less than the per capita poverty threshold to the total number of families or individuals; hence P = (Q/n) x 100
• Lorenz Curve


  Curve showing relationship between the population in percentile ranking and the national income, developed by American economist Max O. Lorenz in 1905
• Gini Coefficient


  Scalar metric of inequality that was introduced by Corrado Gini, representing the inequality gap
• Poverty Trap


  A person experiences no advancement for working despite the government's financial assistance even if it sounds to be very reasonable
• Poverty reduction strategies


  • Cash transfers
  • In-kind transfers
  • Work incentives
  • Minimum wage law
  • Adjust tax code
  • Sustainable development goals
• Pantawid Pamilyang Pilipino Program (4Ps) is an example of a conditional cash transfer (CCT) program
• Free flu vaccines are an example of an in-kind transfer
• Minimum wage law is an act of Congress or the Senate that imposes a minimum payment of wage to workers in a specific location, duration of work, and nature of the industry to ensure that a reasonable amount of income is provided to a specific group of employees
• The UN Social Development Goals include priority actions to be taken as addressed in the Johannesburg Plan of Implementation in 2002, prioritizing poverty as a top global challenge that we are currently facing, specifically for developing countries
• How to combat and alleviate poverty

  1. Provide access to quality education

  2. Promote economic development

  3. Improve access to healthcare

  4. Establish social safety nets

  5. Empower women

  6. Advocate for policy change