A Level Economics AQA Practice Exam

Which term describes the necessary income level to maintain basic living standards?

1. Shareholder value

2. Disposable income

3. Absolute poverty

4. Economic sustainability

The correct answer is: Absolute poverty

The term that describes the necessary income level to maintain basic living standards is absolute poverty. Absolute poverty refers to a condition in which individuals lack the minimum resources necessary to meet basic needs, such as food, shelter, and clothing. This concept is often quantified by a specific income threshold, which highlights the income level below which a person cannot sustain a basic quality of life. In contrast, disposable income refers to the amount of money individuals have available for spending and saving after taxes have been deducted, which is not specifically linked to maintaining basic living standards. Shareholder value relates to the financial performance of a company from the perspective of its shareholders, and economic sustainability refers to practices that ensure resources are available for future generations while maintaining ecological balance. Thus, absolute poverty specifically focuses on the level of income that is necessary to avoid deprivation of essential life-sustaining resources.