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# The poverty line, also known as the poverty threshold

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The poverty line, also known as the poverty threshold  [#permalink]

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25 Jun 2018, 02:42
Question 1
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The poverty line, also known as the poverty threshold, is defined as the minimum level of income that is necessary for the people of a specific nation.The poverty line of a country is calculated by identifying the total amount of necessary expenses that an average adult requires over the course of one year, with the main such expense usually being house rent.Additionally, this calculation also typically includes the basic expenses of food and clothing.This measure of minimum income required is purely quantitative and does not estimate either the specific needs of people from different low-income groups or the different ways in which low-income groups experience poverty in different countries.The solely quantitative basis of calculating the minimum required income, therefore, may in fact lead to either the overestimation or the underestimation of the number of people who actually live under the poverty line in a given country.Another reason that renders the poverty line short of being a very reliable indicator of actual poverty levels is that certain nations, usually developed ones, with strong welfare systems fail to account for ‘in-kind’ transfers when calculating the poverty threshold.Such calculations do not regard the benefits received from antipoverty programs such as food stamps, housing assistance, etc. as income, thereby presenting a distorted picture of the level of poverty in the nation. Another reason that the poverty line may not be the most reliable indicator of actual poverty levels is that certain nations, usually developed ones, include systems of social welfare that remain unaccounted for while calculating the proportion of population that does not earn the minimum required income.

1. The primary purpose of the passage is to
A. suggest that the poverty line should not be used as an indicator of actual poverty levels in developed nations, since its use could lead to a miscalculation of the number of people actually living in poverty
B. provide a basis for the conclusion that the economic prosperity of certain countries may lead to a miscalculation of their respective poverty lines
C. identify the reasons that the poverty line does not account for certain sources of income such as social welfare systems
D. argue that, because of the way it is calculated, poverty line, as a measure of the number of people living in poverty, may give inaccurate results
E. propose that the poverty line be replaced by an improved system of calculation for the minimum income required

A. Incorrect: Out of Context
The reference to developed countries is made in the context of a larger point that describes one of the two listed shortcomings of the way PL is calculated. This discussion forms a part of the whole passage that is designed to lead us to the author’s conclusion, which deals with all countries and not just developed ones.
B. Incorrect: Out of Context
Like choice A, this choice too focuses on a detail mentioned in the passage and presents it in the wrong context. The economic prosperity mentioned in the choice could relate to developed nations mentioned in the passage; however, as stated in the explanation for choice A, the reference to developed countries is made in the context of a larger point that describes one of the two listed shortcomings of the way PL is calculated. These two shortcomings form a part of a larger discussion.
C. Incorrect: Out of Scope
The passage identifies reasons to support the conclusion that PL may be unreliable indicator of poverty because of the way it is calculated. One of these reasons is the fact that the calculation does not consider certain sources of income such as social welfare. The passage goes not identify the reasons for the same.
D. Correct
This choice matches the result of our passage analysis and pre-thinking.
E. Incorrect: Out of Scope
The author does not make any suggestion in the passage.

2. Which of the following can be inferred from the last two sentences of the passage?
A. By treating the benefits as income, the nations would not be correctly estimating the extent of poverty in their countries.
B. Although the antipoverty programs give benefits to the people, their effects are not very significant and hence the nations fail to account for them.
C. A calculation done with considering the benefits as income would present a more realistic picture of the poverty in the nation, just as it probably does in developing nations.
D. These nations run a potential risk of overestimating the extent of poverty in their countries by not treating the benefits as income.
E. Housing assistance and food stamps are indeed income for the people who receive them, and hence such people should not get benefits from any other antipoverty program.

A. Incorrect: Opposite
As discussed in the pre-thinking, the author treats the exclusion of such benefits from the calculation as a negative of the PL. However, this choice states the opposite of the thought expressed by the author.
B. Incorrect: Out of Scope
There is no such cause and effect relationship given in the passage.
C. Incorrect: Inconsistent
This would have been the correct answer if the comparison with developing nations had been presented. The author gives us no such comparison in the passage.
D. Correct
This answer choice is on the same lines as the implication we understood from the discussion in the pre-thinking portion.
E. Incorrect: Inconsistent
The author does imply that such benefits should be considered income, but to say that these people should not get benefits from any other poverty program is too extreme. All that the author intends to say is that such benefits should also be counted as income while determining how many people are under the poverty line.

3. Which of the following statements about the poverty line would the author most likely agree with?
A. It is usually used in developed nations to falsify data about the number of people actually living in poverty.
B. Quantitative measurements are likely to be the only accurate measure of the number of people living in poverty.
C. It is not easy to calculate because of the difficulty of gathering data about people from low-income groups.
D. More than one form of measurement may need to be utilized to develop more accurate estimates of poverty levels.
E. Income from social welfare systems should not be taken into account while calculating the minimum required income for an average adult.

A. Incorrect: Out of Scope
The author does not make any such allegations in the passage.
B. Incorrect: Opposite
The author states in the last sentence that the “solely quantitative” basis of calculating PL may lead to inaccurate estimates.
C. Incorrect: Out of Scope
The author does not mention either the complexity level of the calculation process or the methods in which the data is collected.
D. Correct
The passage states that the “solely quantitative” basis of calculating PL may lead to inaccurate estimates, suggesting that a more holistic calculation is required.
E. Incorrect: Opposite
The author treats the exclusion of this source as a shortcoming of the way PL is calculated, implying that it should be accounted for.

4. Which of the following is mentioned in the passage?
A. A qualitative basis for calculating the minimum income required would not result in overestimating the number of people living below the poverty line.
B. Quantitative parameters are poor indicators of poverty.
C. The cost of the basic requirements of housing, food and clothing is not the same in any two economies.
D. The calculation of poverty in developed nations is affected by their misnaming of antipoverty programs.
E. The quantitative basis for calculating the poverty line excludes estimation of the specific needs of people from various low-income groups.

A. Incorrect: Out of Scope
The author talks only about the impact of a calculation done with solely quantitative parameters; there is no mention of the impact of qualitative parameters.

B. Incorrect: Inconsistent
The author says that exclusive focus on quantitative parameters is a shortcoming and not that such parameters are poor indicators of poverty.

C. Incorrect: Inconsistent
The author states that such costs may vastly differ in different countries and not that no two economies can have parity in such costs.

D. Incorrect: Inconsistent
It is not the naming of such programs but instead the exclusion of the benefits received from such programs in the calculation of poverty threshold that affects the calculation of poverty.

E. Correct
This information is given to us in the following section of the passage:

This measure of minimum income required is purely quantitative, and does not estimate either the specific needs of people from different low-income groups…

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Re: The poverty line, also known as the poverty threshold  [#permalink]

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25 Jun 2018, 05:01
8 : 25 minutes. Got second question wrong. I am very poor in RC.
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Re: The poverty line, also known as the poverty threshold  [#permalink]

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26 Jun 2018, 00:05
12 minutes and all correct
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Re: The poverty line, also known as the poverty threshold &nbs [#permalink] 26 Jun 2018, 00:05
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