Question

Setting a specific income level and then defining a person (or household) as poor if his or her (or its) income falls below that income level is called a(n): Select one: a. means-tested test. b. relative income test. c. absolute income test. d. nominal income test.

Answer 1

Answer: Option (c) is correct.

Step-by-step explanation:

Correct: Absolute income test

Absolute income test is a measure of poverty in a country. In absolute income test, there is a setting of income level that is the benchmark for the poverty. This means that if a person's income falls above this income level then he is not considered as poor whereas if a person's income falls below this income level then he regarded as poor.