4.2 - Inequality

Question 1

What is income?

Answer 1

Flows of money generated by individuals as compensation for providing factor of production

Question 2

What is wealth?

Answer 2

Measure of asset ownership by an individual

Question 3

What does income consist of?

Answer 3

Wages
Profit
Rent
Benefits
Interest

Question 4

What does wealth consist of?

Answer 4

Savings
Property
Shares
Land

Question 5

Is wealth inequality more important than income inequality?

Answer 5

Yes
Wealth generates income
More difficult to solve
Generational

Question 6

What are the causes of income inequality?

Answer 6

Income tax
Capital Labour Substitution
Multinationals
Increasing trade

Question 7

What are the effects of income inequality?

Answer 7

Changes in savings
Reduced consumer spending
Decreased productivity
Debt

Question 8

What is the global distribution of inequality?

Answer 8

Africa + South America most unequal
Europe quite balanced - Fairly equal
Variations between North + Central America

Question 9

What is the inequality incentive?

Answer 9

Ability to earn more income acts as skill/productivity incentive

Question 10

What are the causes of inequality between nations?

Answer 10

Health + life expectancy
Education
Loans + debt interest
Real spending power
Primary dependency