Policy Approaches to Alleviate Poverty in an Economic System

The video explores various policy approaches to alleviate poverty within economic systems, focusing on income and wealth inequality. It discusses the fiscal drag effect, poverty trap, and unemployment trap, highlighting how tax and benefit systems can influence poverty levels. The video also examines potential remedies and the importance of adjusting policies for inflation. Key considerations include economic schools of thought, fairness perceptions, and different forms of poverty.

What is one of the main influences on income and wealth inequality within an economic system?

• The rate of technological advancement

• The availability of natural resources

• The structure of tax and benefit systems

• The level of education

What is fiscal drag?

• A decrease in government spending

• An increase in inflation rates

• The failure to adjust tax thresholds for inflation

• A reduction in tax rates

In the UK tax system, what is the basic rate of income tax applied to?

• Income below £11,850

• Income between £11,851 and £46,350

• Income over £150,000

• Income between £46,351 and £150,000

What is the poverty trap?

• A situation where inflation rates decrease

• A scenario where unemployment rates rise

• A condition where low-wage earners remain in poverty due to overlapping tax and benefit thresholds

• A situation where high earners pay more tax

Which of the following is a potential remedy for the poverty trap?

• Increasing the tax rate

• Reducing government benefits

• Raising the tax threshold

• Decreasing the minimum wage

What is the unemployment trap?

• A situation where people choose to remain unemployed due to generous benefits

• A scenario where inflation rates decrease

• A condition where high earners pay more tax

• A situation where low-wage earners remain in poverty

Which of the following is a potential solution to the unemployment trap?

• Decreasing the minimum wage

• Reducing government spending

• Reforming the benefits system to encourage work

• Increasing the tax rate

What is a key consideration when dealing with poverty according to different economic schools of thought?

• The perception of fairness

• The level of technological advancement

• The rate of inflation

• The availability of natural resources

Which of the following is NOT a form of poverty mentioned in the lecture?

• Fuel poverty

• Educational poverty

• Old age poverty

• Child poverty

What is an important factor in determining whether people are in poverty?

• Their level of education

• Their access to opportunities

• Their geographical location

• Their family size