Consider the following distribution of income in a 12-person economy. (1. 1, 1.5, 1.5, 2, 2, 2, 2, 3, 3, 3, 3). Calculate the P₂ FGT poverty measure assuming that the poverty line is 1.8 (Round to 3 decimal places)
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- If the calculation of the poverty line included the value of government programs as income, the number of people being counted as poor would be because the incomes of people would be the same higher lower the same lower higherThe figure shows the distribution of pre-tax income for Canadian families in 2015. Distribution of Family Income, 2015 60- Which of the following best describes the distribution of pre-tax earnings? 50- A. Just over 40 percent of families earned less than $40,000 while just over 20 percent of families earned more than $100,000. 41.8% 40- 38.4% B. Nearly 40 percent of families earned less than $40,000 while just under 20 percent of families earned more than $100,000. O C. Just over 20 percent of families earned less than $40,000 while just over 40 percent of families earned more than $100,000. 30- 19.8% O D. Nearly 20 percent of families earned less than $40,000 while just under 40 percent of families earned more than $100,000. 20- 10- $40K to $100K Pre-tax Family Income < $40K $100K and over Percentage of FamiliesThe FGT0 measure does not reflect the depth of poverty below the poverty line. [6] (i) Suggest a specific income transfer within this economy that demonstrates this limitation of FGT0. Take $1 from person 2 and give it to person 4. This makes person 2 poorer in absolute terms, but does not change FGT0. (ii) Compute FGT0 after the transfer. Still 3/6. (iii)Discuss why this feature limits how useful FGT0 is as a measure of poverty. FGT0 is not able to capture changes among the poor. For example, the desperately poor could become much better off and, as long as they weren’t so much better off that they cross the poverty line, we would see no improvement in poverty as measured by FGT0.
- If a family of three earned $21,000 in 2017, would they be able to make ends meet given the official poverty threshold? What is the poverty line for a family of three? (Use 2017 poverty line).1. Income inequality and the poverty rate The following table summarizes the income distribution for the town of Perkopia, which has a population of 10,000 people. Every individual within an income group earns the same income, and the total annual income in the economy is $500,000,000. Suppose that in 2007, the poverty line is set at an annual income of $42,350 for an individual. Year Lowest Quintile Second Quintile 2001 2007 2013 2019 3.0 3.4 3.8 5.0 Share of Total Income in Perkopia (Percent) 8.6 9.4 9.7 11.0 The data in the table suggest that there was Middle Quintile Fourth Quintile 14.0 14.6 15.2 15.5 21.9 22.4 22.9 25.0 Highest Quintile 52.5 50.2 48.4 43.5 income inequality from 2001 to 2019. MacBook Pro Complete the following table to help you determine the poverty rate in Perkopia in 2007. To do this, begin by determining the total income of all individuals in each quintile using the fact that total annual income in the economy is $500,000,000. Next, determine the income of an…A mother who does not work receives $18,000 in welfare benefits from the government. Suppose that she takes a full-time job paying only $18,000, but forcing her to forego the $18,000 in government benefits. The mother would have to work 50 hours to reach an income of $20,000. This scenario is an example of what type of poverty situation? Review the selections below and choose the one which best answers the question. Select the correct answer below: The poverty trap. The poverty line. The equilibrium wage ratio. O The imbalance of employee wages.
- Q5. Poverty measures a. The Poverty Gap Index or Normalized Poverty Gap is the Average Poverty Gap divided by the poverty line. Show that the poverty gap index is the FGT index with a = 1 b. A population that has a greater share of extreme poor among the poor will have a higher P2, even if it has the same headcount ratio and poverty gap index as another population. Explain. c. Consider a population with four individuals with incomes y₁ = {7, 3, 8, 4} and a poverty yi line yp 5. Calculate Po, P₁, and P2. = d. What is the Multidimensional Poverty Index (MPI) and how is it a more improved measure of poverty?A Gini coefficient of 0.15 would indicate that a society’s distribution of income is: A. PERFECTLY EQUAL B. RELATIVELY EQUAL C. MODERATELY UNEQUAL D. VERY UNEQUAL E. THE MOST UNEQUAL POSSIBLEPoverty is measured by the number of people who fall below a certain level of income—called the poverty line—that defines the income one needs for a basic standard of living. The official definition of the poverty line traces back to Group of answer choices A)The Great Depression B)Mollie Orshansky, whose idea was to define a poverty line based on the cost of a healthy diet. C)1953 and the ability to pay for housing and food. D)The 1965 cost of providing food, housing, and transportation.
- Poverty and Income Distribution: End of Chapter Problems 4. Currently, the poverty threshold for a family of four is just over $25,000 a year. Among the given factors that affect poverty, indicate those that the official poverty threshold accounts for and those that it does not. Accounted for by the official poverty threshold Not accounted for by the official poverty threshold Answer Bank Differences in tax rates between different locales Inflation The cost of essential living expenses Changes in noncash benefits Geographical differences in the cost of livingWhich of the following is NOT a component of the Multidimensional Poverty Index? Whether or not the household lives in a house with clean drinking water Whether or not any household members suffer from malnourishment Whether or not all household members have completed at least 5 years of schooling Whether or not any household members earn less than $2 per dayQuestion 15 Which of the below statements is INCORRECT with regard to poverty in the U.S.? The poverty threshold was created my Mollie Orshansky of the Social Security Administration, in the 1960s. The "poverty threshold," "poverty guidelines" and "poverty line" are identical numbers and are all used for exactly the same purpose. For the year 2021, a single individual making less than $12,880 in any of the 48 contiguous states, falls below the poverty line. For the year 2021, a four person family making less that $29,200 a year in any of the 48 contiguous states, falls below the poverty line.