Economics 11 Q3 - Equity, equality, poverty

What is the main difference between equality and equity?

• Equality focuses on fairness, while equity focuses on equal treatment.

• Equity considers individual needs, while equality provides the same resources for everyone.

• Equality and equity are interchangeable terms.

• Equity is concerned with economic growth, while equality is about income distribution.

Answer explanation

Explanation: Equality means everyone gets the same resources, while equity ensures resources are distributed based on individual needs to achieve fairness.

Which of the following best describes economic inequality?

• Differences in income and wealth distribution across a population

• Lack of access to goods and services for the majority

• High levels of unemployment in an economy

• A situation where all individuals earn the same income

Answer explanation

Explanation: Economic inequality refers to disparities in income and wealth among individuals or groups within a society.

How does the unequal distribution of income differ from the unequal distribution of wealth?

• Income inequality refers to annual earnings, while wealth inequality includes assets.

• Wealth inequality is temporary, while income inequality is long-term.

• Income inequality focuses on savings, while wealth inequality focuses on wages.

• There is no difference between income and wealth inequality.

Answer explanation

Explanation: Income refers to money earned regularly, whereas wealth encompasses accumulated assets like property and savings.

Absolute poverty is defined as:

• Living on less than the median income of a society

• Inability to access basic necessities like food, shelter, and clothing

• Being unemployed for over six months

• Having less wealth than others in the same region

Answer explanation

Explanation: Absolute poverty measures a minimum standard of living required to meet basic needs.

Relative poverty occurs when:

• An individual earns below the national poverty line

• An individual's income is significantly lower than the average income in their society

• A person lacks access to basic healthcare and education

• Poverty levels increase over time in a country

Answer explanation

Explanation: Relative poverty is measured in relation to the economic standards of the society in which a person lives.

Which of the following policies can reduce economic inequality?

• Reducing progressive taxes

• Increasing subsidies for essential goods

• Lowering unemployment benefits

• Increasing consumption taxes

Answer explanation

Explanation: Subsidies on essentials like food and healthcare improve access for lower-income groups, reducing inequality.

One criticism of using income as a measure of economic inequality is:

• It ignores wealth distribution.

• It overstates the inequality gap.

• It focuses too much on consumption patterns.

• It does not consider wage differences.

Answer explanation

Explanation: Income measures do not account for accumulated wealth, which can significantly affect economic inequality.

Which of the following groups is most affected by relative poverty?

• Individuals in rural areas with no access to education

• Workers earning less than the living wage in a developed country

• Homeless populations living on less than $2 per day

• Elderly individuals with significant assets but low income

Answer explanation

Explanation: Relative poverty emphasizes income disparities within a society, even in high-income regions.

Absolute poverty is most prevalent in:

• Developed economies with high income inequality

• Low-income developing countries with limited resources

• Middle-income countries with growing populations

• Urban areas with high living costs

Answer explanation

Explanation: Absolute poverty is common in countries where resources to meet basic needs are scarce.

Which of the following is NOT a direct cause of economic inequality?

• Access to education

• Discrimination

• Global trade agreements

• Equal employment opportunities

Answer explanation

Explanation: Equal opportunities reduce inequality, while the other factors contribute to economic disparities.