When poverty is defined by an relative real income level, what will happen to the poverty rate if the distribution of income is NOT perfectly equal?

Question

Quizplus · Accepted Answer

When poverty is defined by a relative real income level (such as a percentage of the median income), the poverty rate will change with changes in income distribution. If income distribution becomes more unequal, then more people will fall below the poverty line and the poverty rate will increase. If income distribution becomes more equal, then fewer people will fall below the poverty line and the poverty rate will decrease. However, as long as there is any inequality in income distribution, there will always be at least some people who fall below the poverty line, so the poverty rate will never be zero.

When Poverty Is Defined by an Relative Real Income Level