Understanding Poverty and Multidimensional Poverty
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Questions and Answers

What criticism does Jason Hickel express regarding the Sustainable Development Goals (SDGs)?

  • They prioritize economic growth over sustainability.
  • The SDG Index inaccurately measures sustainability. (correct)
  • The goals are not ambitious enough.
  • They focus too little on climate change issues.

What approach does Bjorn Lomborg advocate for in terms of development goals?

  • Prioritization based on estimated costs and benefits. (correct)
  • A detailed list of all proposed goals.
  • A focus solely on environmental goals.
  • Implementing all SDGs simultaneously.

What does the Malthusian trap describe in relation to population growth and resource availability?

  • Population growth outpaces resource availability over time. (correct)
  • Technological advancements will always overcome resource limitations.
  • Food supply increases proportionally to population growth.
  • Resource availability is inversely related to population growth.

Which historical event allowed mankind to escape the Malthusian trap?

<p>The Industrial Revolution. (D)</p> Signup and view all the answers

What is implied about the Sustainable Development Goals when it is stated that they may be too long and unclear?

<p>Their implementation can be overwhelming due to complexity. (B)</p> Signup and view all the answers

What is the primary goal of the state approach to development?

<p>To ensure basic needs and a relatively equal distribution of income (C)</p> Signup and view all the answers

Who were the key figures that advocated for the state approach to development?

<p>Karl Marx and Lenin (A)</p> Signup and view all the answers

Which of the following is NOT a key feature of the state approach?

<p>Market-driven prices for goods and services (A)</p> Signup and view all the answers

What theory explains the view that world poverty is due to unfair trade and colonization?

<p>Dependency theory (A)</p> Signup and view all the answers

What is a common criticism of multinational corporations in relation to developing countries?

<p>They keep poor countries poor. (A)</p> Signup and view all the answers

What is one of the major problems identified by Paul Collier that contributes to resistant poverty?

<p>Conflict trap (D)</p> Signup and view all the answers

According to Jeffrey Sachs, what is a poverty trap?

<p>Inability to invest enough to escape poverty (B)</p> Signup and view all the answers

Which of the following is NOT mentioned as a cause of poverty traps?

<p>Natural disasters (C)</p> Signup and view all the answers

What is the 'big push' suggested by Jeffrey Sachs?

<p>International community's support through development aid (B)</p> Signup and view all the answers

What does the term 'resource curse' refer to in the context of poverty traps?

<p>Wealth from natural resources leading to conflicts (B)</p> Signup and view all the answers

Which countries are primarily affected by the natural resource trap as mentioned by Paul Collier?

<p>Venezuela and Angola (C)</p> Signup and view all the answers

What was the 1970 UN resolution target for Official Development Assistance (ODA) to Gross National Income?

<p>0.7% (D)</p> Signup and view all the answers

What is one suggested instrument to escape poverty traps according to Collier?

<p>Military intervention (B)</p> Signup and view all the answers

What does 'poor governance' refer to as a cause of poverty traps?

<p>Corruption and incompetence (A)</p> Signup and view all the answers

Which of the following accurately describes the impact of geography as a barrier to escaping poverty?

<p>Certain geographical features can worsen poverty conditions. (D)</p> Signup and view all the answers

What is a defining characteristic of state capitalism or the blended approach?

<p>Deep state engagement in the production of private goods through SOEs (A)</p> Signup and view all the answers

What was the trend in extreme poverty since the 1980s?

<p>Extreme poverty has diminished significantly worldwide. (A)</p> Signup and view all the answers

Which region has not experienced a decrease in the number of people living in extreme poverty?

<p>Sub-Saharan Africa (B)</p> Signup and view all the answers

Which country is NOT mentioned as an example of state capitalism or the blended approach?

<p>United States (C)</p> Signup and view all the answers

What role do state-owned enterprises (SOEs) play in a state capitalism model?

<p>They are granted dominant positions due to their reliability (D)</p> Signup and view all the answers

What event caused a notable disturbance in the trend of extreme poverty in recent years?

<p>The COVID-19 pandemic and the war in Ukraine (B)</p> Signup and view all the answers

Which of the following was NOT one of the Millennium Development Goals?

<p>Reduce high school dropout rates (D)</p> Signup and view all the answers

What economic phase might precede a transition to a free market or centrally planned mode?

<p>State capitalism or blended approach (A)</p> Signup and view all the answers

Which of the following statements about governance in state capitalism is true?

<p>Successful systems may have different types of governance, including single-party systems (A)</p> Signup and view all the answers

What was Target 1a under the first Millennium Development Goal?

<p>Reduce by half the proportion of people living on less than a dollar a day. (A)</p> Signup and view all the answers

What is considered crucial for achieving the right balance in development approaches?

<p>Good governance (B)</p> Signup and view all the answers

Which specific measure relates to Target 1b of the MDGs?

<p>Growth rate of GDP per person employed (C)</p> Signup and view all the answers

During what period were the Millennium Development Goals (MDGs) sought to be achieved?

<p>2000-2015 (C)</p> Signup and view all the answers

The shift from which system can lead to the adoption of a blended approach in countries like Vietnam and China?

<p>Communism (D)</p> Signup and view all the answers

Which target under MDG 1 focuses on reducing hunger?

<p>Target 1c (C)</p> Signup and view all the answers

What economic aspect is highlighted as potentially preferable in the early stages of development?

<p>State capitalism focused on infant industry protection (D)</p> Signup and view all the answers

What did Oskar Lange claim about the capabilities of a planned economy?

<p>A state can achieve similar outcomes as a market economy under perfect competition. (D)</p> Signup and view all the answers

What criticism did Friedrich von Hayek have regarding planned economies?

<p>They struggle with the amount of information needed for organizing the economy. (B)</p> Signup and view all the answers

Which of the following is a consequence of a command economy?

<p>Corruption and cronyism. (A)</p> Signup and view all the answers

In practice, what is a common issue found in command economies?

<p>Waste due to lack of incentives. (C)</p> Signup and view all the answers

What is one way a command economy suppresses individual freedoms?

<p>By imprisoning dissenters who criticize the regime. (B)</p> Signup and view all the answers

What often happens to wealth distribution in command economies?

<p>Emergence of stark inequalities between elites and the masses. (C)</p> Signup and view all the answers

What is a potential effect of lacking competition in a command economy?

<p>Worker apathy towards job performance. (D)</p> Signup and view all the answers

Which phrase best describes cronyism in the context of a command economy?

<p>Favoritism shown to friends despite lack of competence. (C)</p> Signup and view all the answers

What is one significant impact of lower educational attainment in poverty-stricken areas?

<p>Higher unemployment rates. (C)</p> Signup and view all the answers

What type of programs are considered crucial in addressing immediate needs of individuals living in poverty?

<p>Social protection programs. (A)</p> Signup and view all the answers

How does poverty contribute to societal problems such as crime and violence?

<p>By exacerbating existing inequalities. (B)</p> Signup and view all the answers

Which strategy is essential for fostering long-term solutions to poverty?

<p>Investment in community development projects. (B)</p> Signup and view all the answers

Consider the role of international development efforts; what is a primary goal?

<p>To empower countries with high poverty rates. (C)</p> Signup and view all the answers

In the context of poverty, what does 'human capital' refer to?

<p>Investment in education and skills development. (D)</p> Signup and view all the answers

What is a significant characteristic of regions experiencing high poverty rates?

<p>Diverse social and economic challenges. (D)</p> Signup and view all the answers

How can policies promoting income inequality reduction impact poverty sustainably?

<p>By ensuring equitable wealth distribution. (C)</p> Signup and view all the answers

What does poverty primarily result from?

<p>Structural issues and individual circumstances (D)</p> Signup and view all the answers

Which of the following is NOT a common method for determining the poverty line?

<p>Calculating average income across households (D)</p> Signup and view all the answers

Which dimension of poverty refers to the lack of social inclusion and opportunities?

<p>Social deprivation (D)</p> Signup and view all the answers

Which factor serves as an indicator of poverty beyond income levels?

<p>Education levels (D)</p> Signup and view all the answers

What tends to exacerbate poverty levels in a community?

<p>High unemployment rates (C)</p> Signup and view all the answers

What is a key consequence of poverty related to health?

<p>Poor health outcomes (C)</p> Signup and view all the answers

Which of the following statements best encapsulates poverty's impact on individuals and communities?

<p>Poverty affects many life aspects including health and education. (D)</p> Signup and view all the answers

What factors can influence the measurement of poverty within a society?

<p>Cultural norms and regional cost of living (A)</p> Signup and view all the answers

Flashcards

State Approach to Development

A development approach where the state controls the economy and makes decisions about production, prices, and distribution of resources.

State Ownership of Resources

An economic system where the state owns and controls the means of production (land, resources, capital, labor).

State Control of Production and Distribution

The state uses its power to control production quotas, allocate resources, and set prices for goods and services.

State Goals of Equality and Basic Needs

The state aims to ensure basic needs are met and distribute income more equally, reducing inequality.

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Dependency Theory

This theory argues that economic disparity between rich and poor countries is due to unfair trade practices, colonialism, and multinational corporations exploiting developing nations.

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Malthusian Trap

The idea that population growth will outpace the growth of resources, leading to poverty and misery. It refers to the work of Thomas Malthus.

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Industrial Revolution

The period in the mid-18th century that saw significant technological advancements in manufacturing and production, leading to economic growth and a change in human living standards.

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Sustainable Development Goals (SDGs)

A set of goals focused on sustainable development adopted by the United Nations in 2015.

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Smart Development Goals

An approach to setting development priorities by evaluating the cost-benefit analysis of different goals, prioritizing those with the greatest net benefit.

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Criticism of SDG Index

The use of the SDG Index to evaluate the sustainability of countries, which some argue is an insufficient measure and may be inadequate for prioritizing development efforts.

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Lange's Theory

The theory that a state-controlled economy can achieve the same outcomes as a free market economy under perfect competition.

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Hayek's Critique

The argument that a centrally planned economy cannot efficiently manage the vast information needed for resource allocation, leading to shortages and surpluses.

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Command Economy

An economic system where the government controls all aspects of production, distribution, and consumption.

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Hidden Unemployment

A situation where individuals are not incentivized to work hard or innovate in a command economy, leading to lower productivity and hidden unemployment.

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Cronyism

The tendency for favoritism and corruption to prevail in command economies, where connections and power supersede merit.

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Suppression of Freedoms

Reduced personal freedoms and restricted political expression in command economies.

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Inequality in Command Economies

The tendency for inequality to persist or even worsen in command economies, despite claims of equal distribution of wealth.

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Command Economy Drawbacks

The argument that a command economy is incompatible with individual incentives, often leading to inefficiencies, corruption, and restrictions on freedom.

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Extreme Poverty

The state of having very little money and basic resources, making it difficult to meet your basic needs.

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Extreme Poverty Trends

The number of people living in extreme poverty has decreased significantly since the 1980s. There has been a remarkable decrease in Asia, while Sub-Saharan Africa still struggles with high poverty rates.

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The Millennium Development Goals (MDGs)

A set of eight goals adopted by the United Nations in 2000, with the aim to achieve them by 2015, aiming to improve global development and address key issues like poverty, hunger, and education.

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Eradicate Extreme Poverty and Hunger (MDG 1)

The first goal of the MDGs aims to eradicate extreme poverty and hunger by reducing the percentage of people living on less than a dollar a day by half.

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Target 1a: Reducing poverty

Target 1a of MDG 1 aimed to reduce the number of people living on less than $1 a day (adjusted for purchasing power parity) by half.

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Target 1b: Promoting Employment

Target 1b of MDG 1 aimed to increase employment opportunities by achieving full and productive work for everyone, particularly women and young people.

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Target 1c: Reducing Hunger

Target 1c of MDG 1 aimed to reduce hunger worldwide by halving the proportion of people suffering from hunger.

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Setbacks to Poverty Reduction

The COVID-19 pandemic and the war in Ukraine resulted in a setback to the progress achieved in reducing poverty, leading to an increase in extreme poverty.

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Poverty Trap

A situation where poverty is self-perpetuating due to a lack of resources and investment.

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Sachs's 'End of Poverty' Theory

The idea that countries in poverty cannot invest enough to grow economically.

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Big Push

A large-scale effort to help countries escape poverty through increased development aid.

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Conflict Trap

A type of poverty trap where ongoing conflict hinders development.

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Natural Resource Trap

A type of poverty trap where abundant natural resources paradoxically lead to poverty.

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Landlocked with Bad Neighbors Trap

The concept that landlocked countries with poor neighbors experience greater difficulty escaping poverty.

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Bad Governance in a Small Country Trap

The idea that a country's size and governance can influence its ability to escape poverty.

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Responsibility of the Wealthy

The idea that the wealthy have a responsibility to help the poor, based on religious, moral, or evolutionary arguments.

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Foreign Aid

Financial assistance provided by one country to another, often with political motivations.

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0.7% ODA Target

The official target for development assistance as a percentage of national income proposed by the United Nations.

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State Capitalism (Blended Approach)

A mixed economic model where the state actively participates in the market through state-owned enterprises (SOEs) or partially privatized firms, while allowing for market forces. It prioritizes national development goals.

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State-Owned Enterprises (SOEs)

Government-owned companies that operate in various sectors like manufacturing, energy, or technology. They often receive special treatment and have more influence than private firms.

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Industry Champions

A policy that provides support and protection to certain domestic companies to help them become more competitive in the global market.

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Free Market Economy

A system of using market forces to allocate resources and set prices, with limited government intervention.

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Centrally Planned Economy

A system where the state controls most aspects of the economy, including production, distribution, and pricing.

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Economic Reforms

The transition of countries from a state capitalist or centrally planned economy to a more free market system, like what happened in China and Vietnam.

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Good Governance

The ability of a government to effectively manage its resources and responsibilities., often crucial for successful economic development.

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Balance Between Market and State

The careful balance between the role of the state and the market in a country's economy to achieve optimal economic outcomes.

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Poverty and Inequality

Poverty is often linked to broader issues of economic inequality, where certain groups have less access to resources and opportunities.

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Poverty and Exclusion

Poverty can lead to social and economic exclusion, limiting access to education, healthcare, and social networks.

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Poverty and Human Capital

Investing in education and skills development can empower individuals to escape poverty and contribute to economic growth.

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Poverty and Sustainable Development

Tackling poverty is closely related to achieving sustainable development goals, such as reducing hunger, improving health, and promoting gender equality.

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Addressing Poverty

Addressing poverty requires a multifaceted approach that considers both the underlying causes and the immediate needs of those affected.

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Strategies to Reduce Poverty

Effective poverty reduction strategies often include investing in education, creating job opportunities, and providing social safety nets to support vulnerable populations.

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Reducing Income Inequality

Reducing income inequality through progressive taxation, fair labor practices, and social programs can help alleviate poverty and create a more equitable society.

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Global Poverty

Global poverty levels vary greatly across regions and countries, often due to historical, political, and social factors.

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What is poverty?

A lack of basic resources like food, shelter, and healthcare, often accompanied by social exclusion and limited power.

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What is a poverty line?

A line representing the minimum income or consumption needed to meet basic needs, calculated using methods like the cost of a basic food basket.

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What causes poverty?

Including factors like systemic inequalities, lack of education, unemployment, and conflict. It's why some people are more likely to be poor.

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What are the consequences of poverty?

Poverty's impact goes beyond money. It affects health, education, and overall well-being, creating a cycle that's hard to break.

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What is a poverty trap?

The idea that poverty can continue to repeat itself due to a lack of resources and opportunities.

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What is multidimensional poverty?

A method of measuring poverty that considers factors beyond income, including education, healthcare access, and housing quality.

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What is foreign aid?

Financial assistance given by one country to another, often with political goals. Aid can be a tool to help reduce poverty.

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What are economic reforms?

The process of transitioning from a command or state-controlled economy to a more market-based system. It helps stimulate growth and reduce poverty .

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Study Notes

Poverty

  • Poverty is defined in terms of income or consumption
  • If income or consumption is below a threshold (poverty line), a person is considered poor
  • Absolute poverty: minimum needed to survive
  • Relative poverty: 60% of median income
  • Extreme poverty is defined by an international poverty line: $2.15 per day (PPP adjusted) in 2017
  • Purchasing power parity (PPP) adjusts for price differences between countries

Multidimensional Poverty

  • Poverty is also measured via non-monetary dimensions
  • Includes health, education, and living standards
  • Reflected in the MDGs and SDGs
  • Income poverty has decreased significantly since the 1980s, both in number and percentage of people affected
  • Decrease is largely in Asia
  • Sub-Saharan Africa shows less significant decrease
  • COVID-19 pandemic and war in Ukraine disrupted downward trend in some parts, potentially increasing the number of people living in extreme poverty

Millennium Development Goals (MDGs) (2000-2015)

  • Eight goals ratified by 189 UN member states
  • Goal 1: Eradicate extreme poverty and hunger
  • Goal 2: Achieve universal primary education
  • Goal 3: Gender equality and empowering women
  • Goal 4: Reduce child mortality
  • Goal 5: Improve maternal health
  • Goal 6: Combat HIV/AIDS, malaria, and other diseases
  • Goal 7: Ensure environmental sustainability
  • Goal 8: Develop global partnership for development

Sustainable Development Goals (SDGs) (2015-2030)

  • Replace the MDGs
  • 17 goals, 169 targets, and 304 indicators
  • Focus on broader range of issues, including sustainability
  • Aims to achieve more than just eradication of poverty
  • Some criticism about too many goals, making them harder to achieve

Criticism of MDGs and SDGs

  • Criticism that the number of goals is too high, making it harder to achieve them all
  • Issues with targets being too relative, not considering starting points of different countries
  • Concerns on lack of focus on sustainability
  • Some suggestions to improve focusing on the most impactful goals

Malthusian Trap and Industrial Revolution

  • Malthusian trap: population growth outpacing resource growth, leading to poverty
  • Industrial Revolution: an escape from the Malthusian trap, enabling increased food production and economic growth

Poverty Traps

  • Poverty traps refer to situations where poor countries struggle to escape poverty due to various factors:
  • Bad economic policies
  • Financial insolvency or poor governance
  • Adverse geographic conditions (landlocked, mountainous)
  • Cultural barriers
  • Geopolitical instability
  • Lack of investment

Aid and Assistance

  • Developed nations have a responsibility to assist developing countries
  • Official Development Assistance (ODA) is insufficient, not reaching the 0.7% target set by the UN
  • Issues of effectiveness and corruption are sometimes raised.

Global Income Evolution

  • Global income and GDP per capita have grown, but inequality persists
  • In 1800, most of the world lived in extreme poverty; this has decreased significantly over time
  • Current distribution appears as a single-humped graph (more people in middle income categories)

Differences between Rich and Poor Countries

  • Gap in terms of purchasing power parity (PPP) is narrower compared to exchange rates
  • Relative GDP per capita (PPP) of high-income countries is decreasing

Global Income Inequality

  • Global income inequality decreased in recent decades due to strong economic growth in countries like China and India.
  • Inequality increased within certain rich countries since the 1980s.
  • Geographical location is important for economic opportunities.
  • There is recognition that issues such as access to technology, trade, and governance are important factors in development.

Approaches to Development

  • Market approach: Limited government intervention, focus on free markets, and private property
  • State approach: Significant government intervention to control resources and redistribute wealth
  • Blended approach: Combines aspects of both market and state approaches, aiming to find a balance, particularly helpful for countries with specific needs in initial stages.

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This quiz explores the definitions and measurements of poverty, including both absolute and relative poverty. It also covers the impact of factors like the COVID-19 pandemic on poverty trends and the significance of the Millennium Development Goals. Test your knowledge on these crucial global issues.

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