Poverty Exam Review

Poverty Exam Review - Nakul Shah Poverty in the US Midterm...

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Nakul Shah Poverty in the US Midterm Study Guide 1. A. Restricted Opportunity: In the debate of who is to blame when it comes to the problem of poverty, restricted opportunity says that it is out of the poor’s control, and they are impoverished because of sex, race, discrimination, etc. B. Human Capital: The abilities everyone is born with, which can either be invested (by going to school) or wasted, bringing you to poverty. This argument for the cause of poverty can only hold true if opportunity exists, investment of capital pays off, and we all have a rational choice in our decisions. C. Poverty Gap: In order to eliminate poverty, the amount of income that would be required to bring every poor person up to the poverty line. D. Flawed Character: Theory that if you are poor you have no work ethic and did not invest in your own human capital. E. Rational Choice: Any decisions made which results in a person becoming poor are caused by their own lapse in judgment. Everyone has the opportunity to work and stay out of poverty, you have to make rational choices which lead you to impoverishment. F. Inequality vs. Poverty: Income inequality can result from normal workings of the market, economic shifts, and instability can impede economic growth which would normally place more people over the poverty line. In these instances, however, more people move further above the poverty line, while more already poor families either remain or move further below the poverty line. Essentially, “the rich get richer while the poor get poorer.” G. Income Mobility: Ability of an individual or family to improve their economic situation and earn high incomes within their lifetime or between generations. H. Absolute Poverty Measures: Politically expedient measure which simply account for sustenance, what is needed to survive. Remains constant over time and only changes for inflation,
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but errors because it does not account for government aid or other things needed to survive such as paying rent and daycare. Does not take geography and cost of living into account, and is individualized, does not recognize multiple families in one home, or roommates. I. Class Stratification: An explanation for why certain groups of people are more poverty stricken than others. At one time was due to overt and institutionalized racism, but now past poverty, economic dislocation, wealth differentials, and family instability pose as barriers. J. Relative Poverty Measures: When compared to the absolute measure, takes more basic needs into account, as well as governmental aid. However, flawed in the fact that it is relative to where you live and what the standards of living are. K. Poverty Line: An income threshold which determines whether one is poor or not. L. Consumption Measures: What is necessary for survival based on sustenance for the body as
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Poverty Exam Review - Nakul Shah Poverty in the US Midterm...

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