Chapter 9 The Distribution Of Income And Wealth Flashcards Preview

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Flashcards in Chapter 9 The Distribution Of Income And Wealth Deck (22)
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Wealth

A stock of valuable assets

1

Marketable wealth

Wealth that can be transferred to others

2

Non marketable wealth

Wealth specific to a person, which cannot be transferred

3

Distribution of wealth

How wealth is shared out between be population

4

Sources of wealth

Inheritance
Savings
Entrepreneurship
Chance

5

The causes of wealth inequality

Inheritance
Marriage
Income inequality
Chance

6

Income

A flow of money to a factor of production. An individual's income may include wages and state benefits.

7

Distribution of income

How income is shared out been the factors of production.

8

Lorenz curve

A diagrammatic representation of the distribution of income and wealth

9

Gin coefficient

A statistical measure of degree of inequality of income or wealth

10

Causes of income equality

Impact of the state
Wealth inequality
Household competition
Level of skills and qualifications
Difference in earnings

11

Absolute poverty

When an individual or households income is insufficient for them to afford basic shelter, food or clothing

12

Relative poverty

When people are poor in comparison to others in society

13

What is used to measure poverty

Poverty audit

14

Causes of poverty

Unemployement
Low wage
Sickness and disability
Old age
The poverty trap
Imperfect information

15

Poverty trap

When individuals or households are no better off following a pay increase because tax paid increases and benefits are withdrawn.

16

Policies used to tackle poverty

A national minimum wage
Cutting the bottom date of income taxes
Tackling unemployment
Training and education
Exploiting trackless down effects
Increasing benefits
Tax credits

17

Vuluntary unemployment

When a worker chooses not to accept a job at the going wage rate

18

Equity

Is about social justice and fairness, distribution goals. It requires that there is a fair distribution of welfare, that is a fair distribution of the economy' gds + s's

19

Minimum wage

A minimum wage is a price floor - employers cannot legally undercut the current minimum wage rate per hour

20

Vertical equity

Different treatment of people with different characteristics to promote greater equity

21

Horizontal equity

Implies we give the same treatment to different people in an identical situation.