Principles of Microeconomics / Unit 14 MIC 1302 short lesson, about 20 seconds
The Poverty Line
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The idea
The official line is absolute: the nineteen sixty-three cost of an adequate diet times three, since families then spent a third of income on food, price-adjusted since. A relative test calls the bottom of the distribution poor.
In practice
The European Union's line is sixty percent of median income.
Where people slip
The line counts cash only and ignores in-kind aid; its virtue is consistency over time.
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