the distribution of income & wealth: poverty & inequality Flashcards
(17 cards)
What is the difference between income and wealth?
Income is flow of money received over time; wealth is the stock of assets owned.
What factors influence the distribution of income and wealth?
(A) Inheritance. (B) Education. (C) Labour market factors. (D) Ownership of capital.
(E) Government policy.
What is the difference between equality and equity?
Equality = same distribution. Equity = fairness, which may involve unequal but just
distribution.
What does the Lorenz curve show?
Shows the cumulative share of income or wealth held by percentiles of the
population.
What is the Gini coefficient?
Gini coefficient quantifies inequality on a 0–1 scale (0 = perfect equality).
What are the likely benefits of a more equal distribution?
(A) Reduces poverty. (B) Increases cohesion. (C) Improves opportunity.
What are the likely costs of a more equal distribution?
(A) May reduce incentives. (B) Higher taxes may discourage investment.
What are the likely benefits of a more unequal distribution?
(A) Incentivises effort. (B) Encourages innovation.
What are the likely costs of a more unequal distribution?
(A) Increases poverty. (B) Social unrest. (C) Under-consumption.
What role do value judgements play in views on distribution?
Value judgements influence what is considered fair and guide policy preferences.
What is the difference between relative and absolute poverty?
Absolute = below a minimum standard of living. Relative = below a percentage of
median income.
What are the main causes of poverty?
(A) Unemployment. (B) Low pay. (C) Poor education. (D) Discrimination. (E) Health
issues.
What are the main effects of poverty?
(A) Poor health. (B) Lower life expectancy. (C) Reduced education. (D) Lower
productivity.
What policies can be used to influence income and wealth distribution?
(A) Taxation. (B) Welfare payments. (C) Minimum wage. (D) Public services.
What policies can be used to alleviate poverty?
(A) Benefit systems. (B) Universal credit. (C) Education and training. (D) Employment
support.
What are the economic consequences of these policies?
(A) Incentive effects. (B) Cost to government. (C) Impact on growth and inequality.
What perspectives influence views on redistribution?
Moral and political views shape preferences for redistribution.
