Pearson Edexcel IAL Economics 4.3.4 Poverty & inequality Question Bank

Practise interpreting poverty and inequality evidence, including Lorenz curves, Gini coefficients, causes of change and policy impacts.

Exam points

interpret Lorenz curve shifts and Gini data to judge whether income inequality has changed
distinguish absolute poverty from relative poverty using basic needs and income thresholds
explain how unemployment, transfer payments, education and tax policy affect inequality

Covered syllabus points

4.3.4.1a - distinction between absolute and relative poverty 4.3.4.1b - Measures of absolute and relative poverty 4.3.4.1c - Causes of changes in absolute and relative poverty: • economic growth • education and 4.3.4.2a - distinction between wealth inequality and income inequality 4.3.4.2b - Measurements of inequality: • the Lorenz curve • the Gini coefficient 4.3.4.2c - Causes of inequality in income and wealth within countries and between countries 4.3.4.2d - impact of inequality on: • enterprise • incentives • savings • education • migration •4.3.4.2e - impact of economic change and development on inequality 4.3.4.2f - significance of the free market economy (capitalism) for inequality

[Maximum number: 1]

In 2022 Madagascar had an absolute poverty rate of 71\%.
Which one of the following statements about absolute poverty is true?

Absolute poverty is the inability of individuals or groups to meet their basic needs

Absolute poverty is based on value judgements and is subject to changes over time

Absolute poverty measures the percentage of people within a country earning less than 60\% of median income

Absolute poverty measures the percentage of people earning more than $ 2.15 a day at 2017 PPP values

[Maximum number: 1]

The chart shows the Dominican Republic's Gini coefficient, expressed as a percentage, between 2018 and 2021.

Figure for Question 4.3.4 - Poverty and inequality question 2 — Edexcel A-Level Economics A2

Which one of the following can be deduced from this chart?

Between 2018 and 2021 the Lorenz curve shifted closer to the line of perfect equality

Between 2018 and 2019 the distribution of income became more unequal

Between 2019 and 2020 there was perfect income inequality

Between 2020 and 2021 income inequality increased by approximately 1.1\%

[Maximum number: 1]

Armenia's Gini coefficient increased from 0.28 in 2009 to 0.34 in 2017.
Which one of the following is most likely to reduce Armenia's income inequality?

A reduction in the national minimum wage

An improvement in education and training

A decrease in progressive tax rates

An increase in regressive tax rates

All question bank results loaded

Covered syllabus points

4.3.4 - Poverty and inequality question 1

4.3.4 - Poverty and inequality question 2

4.3.4 - Poverty and inequality question 3