4.2.2 - Inequality

Question 1

What’s absolute poverty?

Answer 1

When a household does not have sufficient income to sustain even a basic acceptable standard of living and to meet people’s essential, core needs.

Question 2

What’s relative poverty?

Answer 2

Relative poverty is household income considerably lower than the median income within a country.

The household has to make more sacrifices in order to get by.

Question 3

Name one of the two measures of income inequality

Answer 3

• The Lorenz Curve
• The Gini Coefficient

Question 4

What’s the Gini Coefficient?

Answer 4

A measure of income inequality that condenses the entire income distribution for a country into a single number between 0 and 1.

The higher the number, the greater the degree of income inequality.