Which statement best defines absolute poverty?
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B. Absolute poverty is based on a fixed minimum standard of basic needs, while A describes relative poverty.
Which statement best defines relative poverty?
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D. Relative poverty compares income with the median in a society, while C describes absolute poverty.
In Country X, median income rises over time but the income of the poorest households stays the same. Which outcome is most likely?
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A. Relative poverty increases when poor households fall further behind the median, while B depends on a fixed basic-needs line.
A country sets its relative poverty line at 50 per cent of median income. If median income is 4,000 fictional units, what is the poverty line?
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C. 50 per cent of 4,000 is 2,000, while A would be 25 per cent of median income.
A household earns 1,600 fictional units per year. The absolute poverty line is 2,000 units. How far below the poverty line is the household?
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B. The shortfall is 2,000 minus 1,600, which equals 400 units; A is too small.
Which factor is most likely to cause poverty by reducing a worker's productivity and wages?
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D. Lack of education and skills can lower productivity and wages, while A usually raises earning potential.
Which factor is most likely to cause poverty in the labour market?
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A. Discrimination can restrict job opportunities and lower pay, while B tends to improve opportunities.
Which factor is most likely to push poor households into deeper poverty?
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C. High inflation erodes the real value of incomes if wages do not rise, while B can raise incomes.
Which policy is most likely to redistribute income from higher-income to lower-income groups?
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B. A progressive income tax takes a larger proportion from higher incomes, while A takes a larger proportion from lower incomes.
Which policy directly provides income support to poor households?
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D. Targeted cash transfers raise the incomes of poor households, while A reduces their income support.
Which policy is most likely to raise the pay of low-paid workers?
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A. A minimum wage sets a legal pay floor for low-paid workers, while D raises prices and can hurt the poor.
Which policy helps alleviate poverty by improving the skills and employability of unemployed workers?
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C. Vocational training can improve skills and job prospects, while B reduces human capital.
Which international policy is most likely to help heavily indebted poor countries reduce poverty?
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B. Debt relief can free government resources for poverty reduction, while A makes exports less competitive.
Which statement about absolute and relative poverty is correct?
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D. Relative poverty compares income with the median, so it can persist in richer countries, while C confuses the two measures.
Which combination of policies is most likely to alleviate poverty and redistribute income?
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A. Progressive taxes and targeted benefits redistribute income to poorer groups, while B worsens inequality.