GRADE 12 ECONOMICS

Poverty

Poverty is defined as the inability to attain a minimum standard of living.

Types of Poverty

• Absolute Poverty: Inability to fulfill basic needs such as food, clothing, shelter, education, and health services.
• Relative Poverty: Sufficient income to sustain life, but lower income and living standard compared to the rest of the community.

Characteristics of the Poor

• Low level of income
• Poor and insecure occupation
• Large household size
• Low level of education
• High proportion of income spent on food
• Low social status
• Poor housing condition
• Residence in backward or remote areas

Causes of Poverty

• Rapid population growth
• Unemployment and underemployment
• Low productivity in the agricultural sector
• Income and wealth inequality
• Low level of rural development
• Slow pace of industrial development
• Inflation
• Regional disparities
• Underutilization of local resources
• Ineffective implementation of development plans

Measures for Poverty Reduction

• Achieving a high rate of economic growth
• Control of population growth
• Generation of employment opportunities
• Reduction of income and wealth inequality
• Expansion of social security programs
• Human resource development
• Effective food pricing and distribution policy
• Development of the agricultural sector
• Development of infrastructure
• Promotion of foreign employment

Inequality

Inequality is defined as the situation in which income and wealth are distributed unequally among the people of a country.

Causes of Inequality

• Unequal distribution of property or assets
• Unemployment
• High population growth
• Inflation
• System of private property
• Differences in education and training opportunities
• Right of inheritance
• Differences in inborn abilities and skills

Measures to Reduce Inequality

• Equitable distribution of property and assets
• Generation of employment opportunities
• Control of population growth
• Control of inflation
• Expansion of social security measures
• Equal access to education, health, training, and opportunities
• Development of agriculture
• Development of infrastructure

Unemployment

Unemployment is defined as the non-availability of jobs for people who are able and willing to work at the prevailing wage rate. It is a serious problem in both developed and developing countries.

Types of Unemployment

• Open unemployment
• Underemployment
• Disguised unemployment
• Cyclical unemployment
• Seasonal unemployment
• Frictional unemployment
• Structural unemployment
• Educated unemployment

Causes of Unemployment

• High population growth rate
• Slow pace of economic growth
• Slow industrial development
• Seasonal nature of agriculture
• Unequal distribution of land
• Use of capital-intensive techniques
• Lack of infrastructure
• Low level of saving and investment

Measures to Create Employment Opportunities

• Increase in the rate of economic growth
• Rapid industrial development
• Development of the agricultural sector
• Expansion of credit facilities
• Development of infrastructure
• Promotion of cottage and small-scale industries
• Educational reforms
• Use of labour-intensive techniques

Human Resource

Human resource refers to the knowledge, skills, efficiency, and physical and mental abilities inherent in the people of a country.

Role of Human Resource

• Utilization of natural resources
• Efficient use of physical capital
• Increase in production and productivity
• Development of agricultural and industrial sectors
• Technological improvement
• Development of infrastructure
• Social development
• Reduction of economic backwardness

Human Development

Human Development Indicators measure the quality of life and standard of living of people in a country.

Human Development Indicators

• Per capita income
• Life expectancy at birth
• Educational attainment
• Fulfillment of basic needs
• Maternal mortality rate
• Level of happiness
• Human Development Index (HDI)

Human Development Index (HDI)

The Human Development Index (HDI) is a composite index that measures three key dimensions of human development:

• A long and healthy life
• Access to education
• A decent standard of living

The HDI was developed by Pakistani economist Mahbub ul Haq in 1990 and was first published by the United Nations Development Programme (UNDP) in the Human Development Report in 1990.