Poverty

Which statement about the poorest households in developing economies is least likely to be correct?

May/June 2017

Which feature indicates that a country experiences significant absolute poverty?

May/June 2018

More than two-thirds of the world's poorest people live in rural locations. Most of them work in subsistence agriculture. What accounts for poverty staying at a high level among subsistence farming families?

May/June 2018

Which policy would be most likely to lower relative poverty?

May/June 2019

UBI is a plan under which a government gives a payment to everyone, whatever their personal situation. A scheme like this can assist several groups, including the sick and the old. In 2016, the Indian government was considering UBI as an alternative to its present system of state benefits. A politician in Costa Rica suggested a UBI of $337.5. Finland began a two-year trial of a version of UBI in 2017. A guaranteed minimum income could support some poor people who do not currently receive state benefits and could also lessen inequality. In many countries, income and wealth inequality is rising. For example, in Russia 16% of the population live below the official poverty line and 10% of the population own 87% of the country’s wealth. State benefits are comparatively low in Russia and the country has one income tax rate of 13%. One reason for the widening gap between the rich and the poor in Russia has been the impact on prices and profits caused by the privatisation of several state monopolies. Differences in annual average incomes (annual GDP per head) between countries can influence life expectancy as shown in Table 1.1. In Finland, a country with an average monthly income per head of $3500, the trial UBI is $600 per month. This does not meet everyone’s needs in a country with high prices, high tax rates and periods of very cold weather. In India, the average monthly income per head is almost identical to Finland’s UBI. A UBI could support the unemployed, including those who are only temporarily unemployed. Governments welcome lower unemployment because it raises output and allows governments to cut spending on state benefits for the unemployed. Governments could then raise spending in other areas, including education and healthcare.

May/June 2019

In a high-income economy, the wealthiest 60% of the population experienced a rise in income, while the income of the remaining population stayed unchanged. What happened to absolute poverty and relative poverty?

May/June 2021

The top $60\%$ of the population in a high-income economy experienced a rise in income. The income of the remaining people stayed unchanged. What effect did this have on absolute and relative poverty?

May/June 2021

When a recession occurs, many people in a city lose their jobs and their incomes decrease. Some people can no longer afford to pay rent for their homes or to purchase the food they need. What is the effect of the recession in the city?

May/June 2023

The Peruvian government aimed to cut the proportion of its population living in poverty. Which change would not show that the Peruvian government had made progress towards this target?

May/June 2023

In South Africa, living standards, including education, have improved for most people in recent years. Many households now have more money, and the government collects more tax revenue. Even so, income inequality is still very large. In 2020, $36\%$ of the population were living in poverty. Raising unemployment benefit payments could help to reduce this poverty.

May/June 2023

Colombia’s population pyramid is taking on a new shape. Even so, the pattern of income distribution in this South American nation is not shifting very much. It has one of the world’s most unequal income distributions. Some Colombians are employed in the footwear industry, which makes shoes, sandals and boots. Footwear is produced in the private sector, yet Colombia has a mixed economic system.

May/June 2025

Rwanda is a small African country without a coastline. Its economic performance has improved a lot in recent years. For example, in 2012 it recorded GDP growth of 7.5%, inflation stayed stable and unemployment fell. Most strikingly, poverty is being cut. From 2006 to 2012, more than 1 million people were lifted out of poverty and, by 2012, 58% of the 12 million population were not poor. The government is using several policies to reduce poverty. One measure is to increase government spending on education and healthcare. More than 90% of children now go to primary school and the proportion progressing to secondary school is rising. Child mortality has dropped and the overall health of the population has improved. Half of the population is under 25 years of age. The country is very densely populated, with 430 people per square kilometre. In 2013 it had net immigration, so the migration rate was positive, with more people arriving than leaving. Migration is one factor affecting a country’s economic growth rate (see Table 1). Productivity is another factor affecting the economic growth rate. The Rwandan Government wants to increase productivity in agriculture, which provides 80% of employment. Investment in this sector has been limited. Many farms do not have equipment such as ploughs and tractors. Domestic agricultural output does not always equal domestic demand. As a result, the country often has to bring in food from abroad. The government is trying to persuade farmers to use sustainable methods and to focus on products with price-inelastic demand. Rwanda is dealing with a range of difficulties. The Rwandan Government has removed import tariffs on some products, including certain food items. Energy costs are fairly high and the banking sector is not well developed. In 2012 only one fifth of Rwandan adults had a bank account, but falling poverty and growth in banking are likely to alter saving and borrowing in Rwanda in the future.

Oct/Nov 2015

What term is used to describe absolute and relative poverty?

Oct/Nov 2018

The table presents the percentage share of GDP belonging to the richest $20\%$ and the poorest $20\%$ of the population in each country. Which country showed the widest gap between income and poverty?

Oct/Nov 2019

The table gives the percentage share of GDP owned by the richest 20% and the poorest 20% of the population in each country. Which country had the widest gap between income and poverty?

Oct/Nov 2019

In countries experiencing absolute poverty, low incomes can trigger a cycle that perpetuates low incomes. What stages does this cycle involve?

Oct/Nov 2020

Poverty in households can be described using relative terms. What shows relative poverty?

Oct/Nov 2021

What might help to lessen poverty?

Oct/Nov 2021

The greatest reduction in absolute poverty can be achieved by lowering

Oct/Nov 2022

The Chinese government is worried about the extent of poverty and the requirement for more resources in the country’s low-income regions. Consequently, it is raising spending in those regions and cutting it in the high-income regions. Which economic concept is shown by this government policy?

Oct/Nov 2022

In a number of high-income economies, rising income inequality has resulted in higher poverty levels. Which mix of policies would be intended to lessen income inequality?

Oct/Nov 2025