Recession's Impact on Absolute vs. Relative Poverty

Steps:

• Identify absolute poverty as inability to afford basic needs like food and shelter.
• Note recession causes widespread unemployment and income drops, pushing more below subsistence levels.
• Define relative poverty as income below a percentage of the society's median income.
• Recognize recession lowers most incomes proportionally, keeping relative income gaps stable.

Why A is correct:

• Absolute poverty increases because fixed basic needs thresholds are unmet by falling incomes; relative poverty remains unchanged as the income distribution shifts uniformly without widening gaps.

Why the others are wrong:

• B: Relative poverty does not increase, as proportional income drops preserve distribution.
• C: Absolute poverty increases due to unmet basic needs from income loss.
• D: Absolute poverty increases, so both cannot remain unchanged.

Final answer: A