The Smith family has a monthly income of $2000, of which they spend $1300, or 65 percent of their income, on food, rent, home heating, and electricity. According to Stats Canada, the Smith family is characterized as living in poverty based on which of the following measures?

Question

Quizplus · Accepted Answer

The low-income cutoff measure (LICO) is a measure used by Statistics Canada to define and measure poverty in Canada. It compares a family's income to the average income of similar families, taking into account family size, location, and urban or rural residency. The Smith family's income falls below the LICO, which makes them classified as living in poverty according to this measure. The other measures listed (absolute measure, market basket measure, social welfare measure) are not appropriate for this situation as they involve different criteria and/or data.

The Smith Family Has a Monthly Income of $2000, of Which