Definitions
What is the definition of 'Absolute poverty'
Absolute poverty - when a persons income isnt enough to cover basic needs such as food, health, education
What is the name of this graph
The Lorenz curve
Name two of the aspects of the Cycle of poverty
1. child growing up in poverty
2. disadvantage in education and skills
3. struggles to get a job
4. fail to escape the poverty cycle
5. family in povery
A country opens up to free trade. Factory workers in rich countries lose jobs because production moves to countries with cheaper labour. Which type of inequality can this create?
Income inequality / inequality between low-skilled and high-skilled workers
What is the definition of 'Relative Poverty'
Relative Poverty - a comparative measure based on the living standards in a particular country
What is the name of this line
Line of Equality
What kinds of inequalities do we see in the world
Outcomes and Opportunities
A multinational company moves production from Denmark to Vietnam to reduce labour costs. Vietnamese workers get jobs, but Danish factory workers may become unemployed. Explain how globalization can both reduce and increase inequality.
It can reduce global inequality by creating jobs in poorer countries, but increase inequality within richer countries by hurting low-skilled workers.
What is the definition and difference between 'Equality' and 'Equity'
Equality - Everyone receives the same things
Equity - People receive based on their needs
What does it indicate when the curve closse by the 45 degree line?
It indicates that the inequality is low
What is the Gini Index
The Gini Index is an indicator that neatly summarizes the information presented in the table and on the Lorenz curve
A country benefits from exporting technology and services, while another country mainly exports raw materials with low wages. How can this create unequal development between countries?
Rich countries earn more from high-value exports, while poorer countries stay dependent on low-value production, increasing inequality between countries.
What is the definition and difference between 'Income' and 'Wealth'
Income - Income includes everything a person earns, such as salary
Wealth - Total assets minus the liabilities
How to construct a Lorenz curve
Calculate the cumulative share of income, and use the data to calculate the share of income per quintile group
What is the definition of 'MPI' and what does it cover
MPI - Multidimensional Poverty Index measures poverty by looking at several basic needs at once, such as health, education, and living standards, to show how and in how many ways people are poor.
A government wants to reduce inequality caused by globalization without stopping international trade. Suggest two policies it could use and explain why they help.
Education/retraining helps workers get new jobs; progressive taxes or welfare redistribute income; minimum wages/labour protections reduce exploitation.