Question : The poverty line is defined as:

Option 1: The minimum wage set by the government
  

Option 2: The level of income below which a person or a household is considered poor
   

Option 3: The average income in an economy

 

Option 4: The level of income above which a person or a household is considered rich

Correct Answer: The level of income below which a person or a household is considered poor

Solution : The correct answer is (b) the level of income below which a person or a household is considered poor.

The poverty line is a threshold or benchmark set by a government or an organization to determine the minimum level of income or resources required for individuals or households to meet their basic needs and avoid poverty. It represents the income level below which individuals or households are considered to be living in poverty.

The specific determination of the poverty line can vary between countries and regions, as it takes into account factors such as the cost of living, household size, and basic needs. Typically, the poverty line is set based on the income necessary to afford essential goods and services, including food, shelter, clothing, healthcare, and education.

Individuals or households with income below the poverty line are generally considered to be living in poverty and may face significant challenges in meeting their basic needs and participating fully in society. Governments and organizations often use the poverty line as a reference point for designing and evaluating social welfare programs, poverty alleviation measures, and income redistribution policies.