ECON 4 Wealth & Inequality Flashcards
(42 cards)
what is equity
the quality of being fair or equal
3 causes of inequality
earned income (race, age, gender etc)government policycompetition
4 types of wealth
physical (antiques etc)propertyprivate pension wealthfinancial
key cause in inequality for wealth
inheritance
formula for gini coeffecient
a/(a+b) *100
value for absolute poverty
less than $1.90
relative income figure
less than 60% median income
3 causes of poverty
lack of human capitaldependencyinfrastructure
what is the poverty cycle
concept that poverty causes poverty
what is horizontal equity
equal treatment of people in the same situation (regardless of age race gender etc)
What is vertical equity
different treatment of indivuduals to promote equity (e.g. progressive taxes)
3 types of taxation
progressive regressivepropotional
6 policies to reduce inequality
Minimum/maximum wagesForced benefits to workersEqual pay legislationTrade unionsPrice controls on necessitiesGoods provided on an income basis
key disadvantage of taxation
lowers incentive to work
Trickle down effect
high wealth in individuals creates jobs
6 development classifications
incomedeveloped, developing, less developedworlds modelNICsBRICsTiger economies
what are the tiger economices
South Korea, Singapore, Taiwan
Why doesn’t growth correlate with development?
other factors can influence, inequlity, corruption, lack of social mobility
three variables of HDI
GNI pc at PPPeducation - mean years life expectancy at birth
What is a hard commodity?
Something that is mined or extracted
What is a soft commodity
something that is grown or raised
why are commodity prices so volatile
very inelastic demand and supply, which mean small changes cause big changes in price
What is the prebisch singer hypothesis
Over the long term, as commodities don’t rise in value as much as technology and other processed materials, the terms of trade of countries with primary product dependency deteriorates
What is the IHDI
Inequality-adjusted HDI(uses atkinson index)
