levo
Log inStart

Poverty and Inequality

Absolute and relative poverty

  • 3 things to know
  • Papers 2 and 3

Overview

Recall questions on absolute and relative poverty and how each is measured, the headcount ratio and poverty gap, and the causes of changes in poverty, from education, transfers, taxation and wages to unemployment, inflation and globalisation.

What you need to know

Answer each one before you reveal it.

Your recallNot started
Key term

How do absolute and relative poverty differ?

Key term

Define the headcount ratio as a measure of poverty.

Key term

How does the threshold used to measure absolute poverty differ from that used for relative poverty?

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    What is absolute poverty?

    Model answer

    A condition where household income is below a fixed threshold necessary to afford basic necessities such as food, shelter, clean water, and clothing required for survival.

  2. 2

    What is relative poverty?

    Model answer

    A condition where household income falls below a certain percentage of the median income in a particular society, meaning individuals cannot afford the standard of living considered normal in that society.

  3. 3

    How does the threshold used to measure absolute poverty differ from that used for relative poverty?

    Model answer

    Absolute poverty uses a fixed monetary threshold that does not change with overall living standards, while relative poverty uses a threshold that varies with the income distribution of a specific country or region.

  4. 4

    Why can absolute poverty theoretically be eliminated while relative poverty cannot?

    Model answer

    Absolute poverty can be eliminated because it is measured against a fixed threshold that all incomes could exceed. Relative poverty will always exist in any society with income inequality because it is measured relative to median income.

  5. 5

    What type of poverty does the World Bank international poverty line measure, and how is it expressed?

    Model answer

    It measures absolute poverty, set at a specific dollar amount per day adjusted for purchasing power parity.

  6. 6

    What is the common threshold used to measure relative poverty?

    Model answer

    The proportion of households earning below 60% of median equivalised household income.

See the rest and revise

Other ways to work this

The same content, four other ways.

What is inside Levo

Six ways to work the same material.

1Closed book
2Open book
3Closed book

The 3-step method, run for you

Answer cold, learn it, then prove it stuck. Levo tracks the jump between your first attempt and your last.

The Nature of Economics
How Markets Work
Market Failure
Government Intervention

Cram a whole paper in one sitting

Sort every topic into what you know and what you do not, then drill only the weak ones.

Higher costs shift supply .
leftwardrightwardoutward

Blank Blitz makes facts automatic

Rapid timed gap-fills on the terms and numbers you need to recall without thinking.

ANiche markets are too small to support a large producer.
BPersonal services lose their appeal once they are scaled up.
COwners may prefer control and independence to higher profit.

Build It gets the exam shape right

Assemble a full-mark answer from its marking points, in the order an examiner wants them.

Monopoly means a market dominated by one seller.
TrueFalse

Test It catches misconceptions

Spot the fault in a statement. The traps are the mistakes students actually make.

721941163128510

Brain Breaks between sessions

Short focus games to reset attention, so the next set lands better than the last.

Every question in Poverty and Inequality, on a schedule.

Attempt a question from memory, write the correct version, then attempt it again. Levo records the jump between your first attempt and your last, and brings each question back on the day you are due to forget it.

Start revising, £5 a monthSee how the method works

Or £46 a year, about £3.83 a month. Cancel anytime.