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Exercises · Q1

Q.Which of the following best describes 'absolute poverty'?

(a) Poverty measured as a fraction of the national median income
(b) Poverty measured against a fixed minimum benchmark of basic needs, regardless of how well-off the rest of society is
(c) Poverty that only exists in developed countries
(d) Poverty measured only in terms of unemployment
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✓ Free question

Option-by-option analysis:

  • (a) describes relative poverty, not absolute poverty — relative poverty is measured as a fraction of median/average income in a society.
  • (b) is the correct definition: absolute poverty fixes a minimum benchmark of basic needs (such as a calorie threshold) and classifies a household as poor if it falls below that fixed line, regardless of how rich or poor the rest of society is. This is the approach India's official poverty line uses.
  • (c) is incorrect — absolute poverty is chiefly used in DEVELOPING countries like India, precisely because meeting basic survival needs is the more urgent policy question there; relative poverty is more commonly used in developed countries.
  • (d) is incorrect — poverty is measured through income/consumption expenditure (or multidimensional deprivation), not through unemployment status alone, though the two are related (Section 6).
✓Final answer

Option (b) — poverty measured against a fixed minimum benchmark of basic needs, regardless of how well-off the rest of society is.

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