Y2 - Poverty and inequality Flashcards Preview

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Flashcards in Y2 - Poverty and inequality Deck (11)
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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