Lesson 4.2.1

4.2.1 Absolute and relative poverty Quiz: Pearson Edexcel Economics, Unit 4

20 questions

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Lesson 4.2.1, Absolute and relative poverty: 20 multiple choice questions for the Pearson Edexcel Economics (9EC0), Unit 4: Theme 4: A global perspective, written with Revision Ninja.

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The 20 questions

  1. Which concept describes income below a fixed threshold required to meet basic physical needs?

    • Absolute poverty
    • Relative poverty
    • Wealth inequality
    • Income inequality

  2. In the UK, relative poverty is usually defined as income below what percentage of median income?

    • 70 per cent
    • 50 per cent
    • 40 per cent
    • 60 per cent

  3. If median household income is £30,000, what is the UK relative poverty threshold of 60 per cent?

    • £20,000
    • £15,000
    • £12,000
    • £18,000

  4. Which measure uses a fixed daily real income threshold to track global poverty?

    • Gini coefficient
    • International poverty line
    • Human Development Index
    • Relative poverty rate

  5. Which factor is most likely to directly cause a reduction in absolute poverty?

    • Rising median wage
    • Higher tax rates
    • Income redistribution
    • Economic growth

  6. Relative poverty rises during economic growth if income gains are concentrated among which group?

    • State pensioners
    • High earners
    • Unemployed workers
    • Low earners

  7. If median income grows faster than the incomes of the poorest households, relative poverty will:

    • Increase
    • Remain unchanged
    • Fall to zero
    • Decrease

  8. If poorest incomes rise above subsistence while median income grows much faster, relative poverty will:

    • Increase
    • Fall to zero
    • Remain unchanged
    • Decrease

  9. Which supply-side policy is most effective at permanently reducing absolute poverty?

    • Interest rate cuts
    • Education investment
    • Price ceilings
    • Import tariffs

  10. An absolute poverty line is £7,000. What happens if household income rises from £6,000 to £7,500?

    • Enters absolute poverty
    • Exits absolute poverty
    • Enters relative poverty
    • Exits relative poverty

  11. When comparing absolute poverty across countries, income data should be adjusted using what?

    • Purchasing power parity
    • Gross national income
    • Consumer price index
    • Nominal exchange rates

  12. Which issue is better measured by relative poverty than by absolute poverty?

    • Absolute starvation
    • Social exclusion
    • Extreme malnutrition
    • Basic shelter access

  13. What is a key limitation of using a fixed absolute poverty line in developed nations?

    • Ignores exchange rates
    • Calculates wealth incorrectly
    • Overstates basic survival
    • Understates relative hardship

  14. If median income falls during a recession, measured relative poverty will likely:

    • Fall
    • Double
    • Rise
    • Stay unchanged

  15. Which poverty measure uses a threshold that does not change when median income increases?

    • Decile ratio
    • Absolute poverty
    • Relative poverty
    • Gini coefficient

  16. Absolute poverty falls while the bottom quintile's income share declines. What has happened to inequality?

    • It has halved
    • It has decreased
    • It remains unchanged
    • It has increased

  17. What can cause relative poverty to rise while absolute poverty falls in an economy?

    • Falling median income
    • Rising median income
    • Equal income growth
    • Falling top incomes

  18. Which policy measure is most directly aimed at reducing relative income poverty?

    • Proportional taxation
    • Interest rate hikes
    • Progressive taxation
    • Regressive taxation

  19. Which economic event is most likely to cause a rise in absolute poverty?

    • Falling inflation
    • Rising employment
    • Economic growth
    • Economic recession

  20. A household's daily income rises from $1.80 to $2.40, crossing the $2.15 absolute poverty line. What is its status?

    • Below relative poverty
    • Above absolute poverty
    • In extreme poverty
    • In absolute poverty

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