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Poverty quiz #1

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Terms in this set (10)

  • How can poverty affect the chances of individuals escaping their economic situation?
    Poverty can create self-reinforcing conditions, known as the poverty trap, where limited access to credit and lower-quality education make it difficult for individuals to improve their economic situation and escape poverty.
  • How do policy-makers define poverty?
    Policy-makers define poverty using the poverty line, a government-set income threshold that varies by household size; families earning below this threshold are considered to be living in poverty.
  • What factors are correlated with poverty?
    Poverty is correlated with race, age, and family composition, with minorities, children, and single female-headed households being more likely to experience poverty.
  • What is another term for the nonworking poor?
    Another term for the nonworking poor is 'those living in poverty who are not part of the labor force,' often including children, the elderly, or those unable to work.
  • Define poverty and name some of the characteristics that affect poverty.
    Poverty is defined as living below the government-set poverty line. Characteristics affecting poverty include race, age, family composition, access to education, and credit constraints.
  • One of the consequences of poverty is that poverty-stricken people often _____.
    One of the consequences of poverty is that poverty-stricken people often have limited access to quality education and credit, making it harder to escape poverty.
  • What is excluded from the official poverty data when calculating a family's income?
    In-kind transfers, such as food stamps and healthcare, are excluded from the official poverty data because they are not considered cash income.
  • How does the poverty rate relate to the overall population?
    The poverty rate is the percentage of the population living below the poverty line, which was about 13.5% in the US at the time referenced.
  • Why do poor families often have difficulty obtaining loans from banks?
    Poor families face credit constraints because banks view them as higher risk and are less willing to lend them money, even if they might be capable of repayment.
  • How does attending underfunded schools impact children from poor families?
    Children from poor families who attend underfunded schools often receive lower-quality education, resulting in reduced human capital and lower future earning potential.