3.3 Fair distribution of income Flashcards
Distribution of income
How incomes are shared out between individuals and households
Income
The reward for thr service provided by a factor of production including labour.
Wealth
The market value of all the assets a person, group or country at a specific point in time.
Wealth is a stock of assets whereas income is a flow over time
What are the 5 different ways an individual can earn income
Wages
Rent
Interest
Profit
State benefits
Gross income
The income received before any taxes or deductions are taken
Net income
The income availible after direct taxes and benefits
Give a statistic about how income is distributed in the UK
the top 20% have 40% of the money
The bottom 20% have 8% of the money
Give 5 reasons why income is distributed unevenly in the UK
- Income earning assets distributed unevenly
- Difference in wages
- Reliance on benefits
- Age
- Gender
What is distribution of wealth
How wealth is shared out between individuals and households
If people started with the same amount of money, why would people not have the same after 5 years
Some would just spend it on goods and services like cars which ould depriciate.
Some would start businesses which would make them money
Why is wealth distributed unevenly in the UK (4)
- Inheritance
- Savings
- Purchase of property
- Enterprise
If a country has high differences in wealth and income, what will be 4 consequences
- Poverty and deprivation
- Poor housing
- Poor health
- Inequality of opportunity
