Chapter 14:

In country A, its population is 300 million, and 50 million people are living below the

poverty line. What is the poverty rate? (show work)

The correct answer is 16.7%

Explanation:

In order to identify the poverty rate for the country A it is needed to calculate how much percent from the general population of 300 million people comprises 50 million people (100 * 50 / 300 = 16.7%).

On practice, calculation of poverty rate is a more complex matter that requires taking into consideration the particular group and it's median household income. Alternatively, poverty can be calculated based on the international poverty line, which is not representative, because each country has a different poverty threshold.