unit 2 sac 2

Question 1

define equality

Answer 1

related to evenness. it is where each person receives the same

Question 2

define equity

Answer 2

related to fairness

Question 3

state the forms of income (8)

Answer 3

earned, unearned, transfer, gross, disposable, nominal, real, social wage

Question 4

define earned income

Answer 4

represents income received for a reward for an individual for their direct or physical contribution to the production process (salary, wages)

Question 5

define unearned income

Answer 5

represents a reward for providing resources other than labour (dividends, rent)

Question 6

define transfer income

Answer 6

income that has been transferred from one group to another via the government (pensions)

Question 7

define gross income

Answer 7

all private or market income plus direct cash benefits received from governments

Question 8

define disposable income

Answer 8

gross income less direct taxes

Question 9

define nominal income

Answer 9

the value of income that is received by an entity in actual dollar terms

Question 10

define real income

Answer 10

the value of income after taking into account the effects of inflation.

Question 11

define social wage income

Answer 11

disposable income plus indirect government benefits provided in the form of goods and services.

Question 12

define absolute poverty

Answer 12

when people live in a situation where they have insufficient income to purchase basic goods and services needed

Question 13

define relative poverty

Answer 13

when people have a low level of income when compared to a generally agreed standard (Henderson poverty line)

Question 14

impact of poverty

Answer 14

reduced access to goods and services, increased mental illnesses, reduced ability to pay for healthcare and education, creation of a poverty cycle between generations

Question 15

causes of income inequality

Answer 15

unemployment, luck, inheritance, factors related to the labour market (skill and talent)