Distribution of Income Flashcards
(16 cards)
What is wealth?
wealth is a stock concept meaning the amount of assets you have t a particular time
How can an asset be considered part of your wealth?
if it can be sold for money
Give two examples of something that can be part of your wealth
bank savings
a house
What is income?
income is a flow concept meaning it the amount of money you receive per week/month/year
Give two examples of income
wage
benifits
What is distribution of income?
the measure of the relative share that segments of the population have e.g the top 1% earn 16% of the national income
What does income inequality refer to?
the fact that some peoples income may be a much smaller % or other peoples income
Name three reasons wealth inequality might occur
people on low incomes cannot afford to save and increase their wealth
wealth can be inherited
it’s easier for people with wealth to gain more wealth (investing, buying properties)
What are the two types of poverty?
Absolute poverty
Relative poverty
What is absolute poverty?
this measures the number of people living below a certain income level which is necessary to afford basic goods and services
What is relative poverty?
this occurs when the income of a household is low compared to others
Name 6 causes of inequality
inequalities in wages and earnings growth
falling relative value of state benefits
unemployment
regressive taxes
inequality of wealth
pensions
what is meant by inequalities in wages and earning growth
workers with higher level skills get paid more than workers with lower level skills
what is meant by falling relative value of state benefits?
people who’s who rely on benefits and pension payments rise in line with inflation which is less than wages that rise after than inflation
Name 3 consequences of inequality
poverty
homelessness
social crimes
Name 5 policies to overcome poverty
minnimum wages
redistributing income through the tax system
benefits for the poor
reducing unemployment
subsidised housing/ travel costs
