3.6.3 impact of inequality on economic agents Flashcards
1
Q
How does inequality motivate workers?
A
Encourages them to learn new skills and work hard.
2
Q
How can inheritance result in an inequality of opportunity and income?
A
They inherit wealth, and can also access the best education and therefore the best jobs.
Wealth can therefore generate more income for the rich.
3
Q
How can income be redistributed?
A
Through government intervention. For example, inheritance tax means rich families cannot keep their entire wealth. State education means everyone can access education.
4
Q
Why can inequality demotivate those on lower incomes?
A
They could feel less involved in society, and have less of an incentive to be productive.
