Measuring Poverty Using an Absolute Income Scale Like the Poverty

question 123

Multiple Choice

Measuring poverty using an absolute income scale like the poverty line can be misleading because

• A) income measures do not include the value of in-kind transfers.
• B) money is more highly valued by the poor than by the rich.
• C) the poor are not likely to participate in the labor market.
• D) income measures are not adjusted for the effects of labor-market discrimination.

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Definitions:

Quota

A fixed share or a specific quantitative limit of something that one is entitled to or is required to contribute or receive.

Percent Rate

The rate of a quantity in relation to 100; often used to describe the rate of interest, inflation, or growth.

Base

In financial terms, it often refers to the main or initial value from which adjustments, like interest or dividends, are calculated.

Cent

A monetary unit in various countries, equal to one hundredth of a dollar, euro, or other decimal currency unit.