Living standards and poverty

G3 Economics - syllabus K343, 2027

Measuring living standards with GDP per head and the HDI, why they differ, and the causes of and policies against poverty.

• Measuring living standards: real GDP per head and HDI

  Real GDP per head measures average income; the HDI adds health and education for a wider view of living standards.

• Why living standards and income differ

  Living standards differ within and between countries because of differences in jobs, skills, wealth, resources and government policy.

• Absolute and relative poverty

  Absolute poverty is not having enough for basic needs; relative poverty is being poor compared with others in the same society.

• Causes of poverty

  Poverty is caused by unemployment, low wages, illness, age and environmental factors such as droughts and floods.

• Policies to reduce poverty and redistribute income

  Growth, education, healthcare, benefits, progressive taxes and minimum wages can all reduce poverty, each with trade-offs.

• Put it together: Reduce poverty

  A government has extra funds to reduce poverty. Compare three uses.