Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 20 - Part VI - Income Inequality and Poverty - Questions for Review - Page 430: 4

Answer

Transitory variations in income affect individuals (in certain areas). Usually, these transitory variations are short term variations. Poverty happens over a longer time frame.

Work Step by Step

Life cycle variations affect individuals since there might be loans taken out for school or housing, and those loans are repaid with a higher income. Living standards earlier in life are not representative of living standards later in life.
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