Poverty

• Absolute poverty is when a person’s income is insufficient to meet basic human needs.
• Relative poverty is when a person’s income is below a society’s average income.
• The causes of poverty include low wages, unemployment, regressive taxation, and health issues.
• The effects of poverty include reduced productivity, lower wages, less spending, and a cycle of poverty.

This module discusses poverty, distinguishing between absolute poverty (where income is insufficient to meet basic needs) and relative poverty (where income is below a society’s average). Causes of poverty include low wages, unemployment, regressive taxation, and health issues. The effects of poverty include reduced productivity, lower wages, decreased spending, and a cycle of poverty that is difficult to break. It is crucial to address poverty from an economic standpoint, as it hinders the optimal use of labor and hampers economic growth.