Question : The poverty gap index measures:
Option 1: The percentage of people living below the poverty line
Option 2: The severity of poverty among the poor
Option 3: The inequality in income distribution
Option 4: The rate of poverty reduction over time
Correct Answer: The severity of poverty among the poor
Solution :
The correct answer is (b) The severity of poverty among the poor.
The poverty gap index is a measure that assesses the severity of poverty among the poor population. It takes into account the depth of poverty by considering how far below the poverty line the income or consumption of the poor falls on average. The index provides an indication of the extent to which the poor are below the poverty line and the intensity of their poverty.
The poverty gap index calculates the average shortfall in income or consumption of the poor relative to the poverty line, and it considers both the number of people below the poverty line and the extent to which they are below it. It provides a measure of the overall welfare loss experienced by the poor due to their poverty status.
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