Chapter 14R, Problem 20MCQ

To determine

The correct combination that describes the changes since the 1970s in the poverty threshold and in the mean income as compared to the median income in the country U.

Answer to Problem 20MCQ

From the available options, the correct option is not adjusted for the standard of living for the poverty threshold and rose faster for mean income compared to median income.

Explanation of Solution

From the year 1970, the poverty threshold does not change or modified for the standard of living when the mean income compared to the median income decreased or constant. It is adjusted when the mean income rose faster than the median income because it only impacts the upper category of the population, not the people in the middle. It means all options: a, c, d, and e are incorrect.

Therefore, the correct option is a (not adjusted for the standard of living for poverty threshold and rose faster for mean income compared to median income).

Economics Concept Introduction

Introduction: The poverty rate shows the ratio of the number of people who are living below the poverty line in the country. The poverty rate in the country U is 11.6% in the year 2021.