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Economics Unit 4 > Poverty And Inequality > Flashcards

Flashcards in Poverty And Inequality Deck (7)
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1

What is absolute poverty?

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

2

What is relative poverty?

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

3

Measures of poverty (2)

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

4

How absolute poverty can be averted? (2)

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

5

How to absolute poverty occur? (4)

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

6

Causes of relative poverty/ inequality (4)

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

7

Wage inequality can occur because of-- (4)

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