Chapter 1 (T-2, Inequality)[3/06/25]

Question 1

Define Inequality.

Answer 1

Inequality refers to difference among people and society in their degree of attainment of various aspects of well-being.

Question 2

Kuznet Curve?

Answer 2

It is a theorotical representation of relation between the inequality and income. Draw the curve!

Question 3

Lorenz Curve.

Answer 3

It is an data-based curve, which plots inequality in a society, the plotting is on culminative basis. Draw a curve!

Question 4

What is “Line of Perfect Equality” and “Line of Perfect Inequality”.

Answer 4

It is an scenario on Lorenz Curve.
When the incomes in the economy is perfectly distributed, that is X=Y, then it is said to be Line of Perfect Equality.
When the incomes in the economy is perfectly unequally distributed it is said to be line of perfect inequality.

Question 5

What is Gini Coefficient? If the country’s GC is increasing then what does it imply?

Answer 5

It’s an ‘statistical measure of inequality’. GC is area btw eqality line and lorenz curve % Area btw equality line and inequality line. Plot it!

Question 6

Reasons for Inequality.

Answer 6

1] Natural Reasons - Ascriptive.
2] Economical Reasons - According to Marx, inequalities exist because of difference in ability to enforce one’s interest.(Survivorship Bias).

Question 7

Relationship between growth and inequality.

Answer 7

According to the basis economic definition, Resources are considered to be scarce resource. Hence, govt priotizes certain sectors which have potential, this leads to development, increased employment, etc in this particular sector at the cost of other sectors. This results in increasing inequality.

Question 8

Which are the two Inequality correcting approches:
1] Tickle-down approch
2] Inclusive Approch

Answer 8

1] The choosen sector grows, Govt effectively collects more resources, govt decides to redistribute rather than to reinvest, the benifits reaches the benificiary.
2] It focuses upon Capability and Opportunity.