USA Poverty Question Answer 2022

Week 4 Homework
(1) (6 points) Consider the definition for poverty in the US.
a. How would you define poverty?
In USA, the poverty means people who lack material possession or
adequate income for the requirements.
b. What would you use to determine whether a particular household were
considered “poor”?
In USA, the Poverty is measured by comparing the income of a person
or his family to a set poverty threshold or minimum amount of income
needed to include fundamental requirements. The individual whose
income comes under the threshold is known as poor.
c. Is your measure an absolute or a relative measure of poverty?
This measure is absolute measure of poverty. The reason is that the
absolute poverty is considered as condition in which income of
household is below the essential level to fulfill basic needs.
(2) (14 points) Consider Prof. Heckman’s article in the Wall Street Journal (found
here: https://www.wsj.com/articles/SB113686119611542381 and as a PDF)
that outlines interventions designed to prevent or reduce poverty.
a. (4 points) In 1-2 sentences, summarize what Prof. Heckman is saying in
the article.
Professor Heckman stated in article ‘Catch 'em Young’ that a best
method to decrease deficit is to make investment in the quality early
childhood development for the deprived kids. It creates best education,
health, financial as well as social results that increase revenues as well
as decrease requirement for the expensive social spending.
b. (5 points) Draw a production possibilities curve for capital and
consumption goods. Draw the impact of early childhood interventions on
the PPF. Be sure to clearly label the x- and y- axis, the original PPF, and
the new PPF.