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Question

Absolute poverty and relative poverty are the types of:

The correct answer is
Poverty

Understanding Types of Poverty: Absolute vs. Relative

The question asks to identify the category to which 'absolute poverty' and 'relative poverty' belong. These are two distinct ways of defining and measuring poverty.

Defining Absolute Poverty

Absolute poverty refers to a severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education, and information. It depends not only on income but also on access to essential services. A common international standard defines absolute poverty as living on less than a specified sum of money per day (e.g., the World Bank's standard of $1.90 per day in 2011 prices).

Defining Relative Poverty

Relative poverty, on the other hand, is defined in relation to the economic status of the majority of the population in a specific country or society. It means having significantly less income and fewer resources than the average person in that society. Someone considered relatively poor might have basic necessities met but still lacks the resources or opportunities to participate fully in their society's standard activities and norms.

Connecting the Concepts

Both absolute and relative poverty are measures or types used to describe the condition of being poor. They represent different viewpoints or thresholds for identifying poverty:

  • Absolute poverty focuses on the lack of essential resources for survival and basic well-being.
  • Relative poverty focuses on the gap between an individual's or household's resources and those considered typical or necessary for social inclusion within a specific society.

Therefore, absolute poverty and relative poverty are fundamentally different ways of conceptualizing and measuring Poverty itself.

Why Other Options Are Incorrect

  • Income Inequality: While relative poverty is related to income inequality (as it describes being poor compared to others), income inequality is a broader concept about the distribution of income across the entire population, not a category that encompasses types of poverty.
  • Social Mobility: This refers to the movement of individuals or groups between different social positions or strata. It is not directly related to the definition or types of poverty.
  • Economic Growth: This is the increase in the production of goods and services in an economy over time. While economic growth can impact poverty levels, it is not a category that includes types of poverty.

In conclusion, absolute poverty and relative poverty are classifications or dimensions within the broader concept of poverty.

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Important Questions from Economics

  1. Hybrid method of accounting for price level changes is the mixture of combination of :
    (i) Current Purchasing Power Method.
    (ii) General Purchasing Power Method.
    (iii) Current Cost Accounting Method.
    (iv) First-in First-out Method.
  2. The advantages of the cost concept is that, valuation of the asset does not depend on the __________.
  3. Who is the First Economist who pointed out that the pricing problem should be studied from the view point of time?
  4. The concept of perfect competition was introduced by __________.
  5. Average number of products/items offered by the company in each product is known as __________.
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