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Poverty - Coggle Diagram
Poverty
Absolute Poverty
A state or condition in which a person lacks the financial resources and essentials for a minimum standard of living
Less than $2.15
The poverty line is normative, it differs based on development, population and politics
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Causes, Consequences,Cures
High Income Countries
All relative poverty, caused by unemployment and age traditionally
More Labour protection laws, more welfare spending
Low Income Countries
Causes -Low income increase propensity to spend on basic necessities.
Saving is very low as it is a luxury good.
Loans are very unlikely for investment as Banks do not have capital to spend
Productivity falls due to lack of tech, worker makes less money, cannot buy better tech so stays inneficiet
Consequences - Entrepreneurs do not want to open businesses in these countries as the Marginal Propensity to Consume non-essential products is low
Cures - Welfare spending, Trickle down System, Progressive taxation and Dibao system
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