Income Distribution Shifts Poverty Measures Differently

Steps:

• Absolute poverty uses a fixed income threshold for basic needs; bottom 40% incomes unchanged, so no shift in who meets this threshold.
• Relative poverty measures income below a share (e.g., 50%) of the median; median falls in the richest 60%, whose incomes rose.
• Rising median increases the relative poverty line.
• Bottom 40% incomes static, so more now fall below the higher relative threshold, increasing relative poverty.

Why C is correct:

• Relative poverty rises because the median income (50th percentile, within top 60%) increases, elevating the threshold while bottom incomes stay fixed.

Why the others are wrong:

• A: Absolute poverty unchanged, as bottom incomes did not decline.
• B: Relative poverty increased due to higher median.
• D: Relative poverty increased, not constant.

Final answer: C