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      Question

      The Poverty Gap Index measures both the number of poor

      and how far below the poverty line they are. Which service sector expansion would most directly reduce the poverty gap? 
      A Luxury hotel construction Correct Answer Incorrect Answer
      B Expansion of public healthcare and subsidized education Correct Answer Incorrect Answer
      C Privatization of water supply Correct Answer Incorrect Answer
      D Growth of high-end retail Correct Answer Incorrect Answer
      E Increase in stock market trading Correct Answer Incorrect Answer

      Solution

      Free or subsidized essential services reduce out-of-pocket expenses of the poor, effectively increasing their real income and reducing the poverty gap. 

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