Why do economists often use a lower

poverty

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threshold for poor countries than for$$ high$-$income countries such as the United$$ States? Is there a difference between relative poverty and absolute $$poverty$?$

Part $2$

Economists use a lower poverty threshold for$$ low$-$income countries because in a country that is poor relative to other$$ countries, a poor person will be

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poorer than a poor person in a rich country. $$ Therefore, the criteria that determine what it means to be poor in a$$ low$-$income country is different than in a$$ high$-$income country.$$

Part $3$

Evaluate the statement$$ below:

$$Yes$,$ there is a difference between absolute and relative poverty. For$$ example, a family of four living in the U$.$S$.$ with a household income of$$ $$100,000$ per year is relatively poor when compared to a family of four with a household income of$$ $$250,000$ per year. $$ However, a family of four with a household income of$$ $$10,000$ per year is living in absolute poverty because it cannot even afford to consume enough goods for subsistence.

Part $4$

The statement is

A$.$

true. Unlike a relative measure of$$ poverty, absolute poverty is independent of time and place. Although it is independent of time and$$ place, different countries can have different definitions of absolute poverty.

B$.$

false. Although absolute poverty and relative poverty are$$ different, absolute poverty is defined as a person living on less than$$ $$1\mathrm{.}50.$ The family of four making$$ $$10,000$ is not living in absolute poverty.

C$.$

false. Although absolute poverty and relative poverty are$$ different, absolute poverty is defined as a person living on less than$$ $$2.$ The family of four making$$ $$10,000$ is not living in absolute poverty.

D$.$

true. Unlike a relative measure of$$ poverty, absolute poverty is independent of time and place. It is based on an international definition of poverty.