Given That the Definition of Poverty Has Not Been Adjusted

question 68

Multiple Choice

Given that the definition of poverty has not been adjusted to reflect the long-term rise in average incomes,you would expect _____ in the percentage of the population living below the poverty line.

• A)a decrease
• B)an increase
• C)no change
• D)It is impossible to determine how the percentage of the population living in poverty might change.

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Definitions:

Moral Hazard

Moral hazard occurs when there is a lack of incentive to guard against risk where one is protected from its consequences, often after entering into a contract or agreement.

Deductible

The amount paid out of pocket by the policyholder before an insurance company covers a claim.

Full Replacement Value

An insurance term referring to the amount necessary to replace damaged or lost property with new items of like kind and quality without deducting for depreciation.

Moral Hazard

A situation where one party in a transaction has the opportunity to take risks because they know they will not have to bear all the consequences.