4.1.7 distribution of income and wealth, poverty and inequality

Question 1

wealth

Answer 1

stock of assets, such as a house, shares, land, cars and savings.

Question 2

wealth inequality

Answer 2

unequal distribution of these assets.

Question 3

income

Answer 3

money received on a regular basis
For example, it could be from a job,
welfare payments, interest or dividends

Question 4

income inequality

Answer 4

When income is unevenly distributed across
a nation,

Question 5

gini coefficient formula

Answer 5

A/A+B
A: area between line of perfect equality and x axis
B: area between lorenz curve and x axis

Question 6

gini of perfect equality

Answer 6

0

Question 7

gini of perfect inequality

Answer 7

1

Question 8

equality

Answer 8

equal distribution of wealth and income in society, so that
everyone has the same income.

Question 9

equity

Answer 9

refers to fairness, or what is considered to be an acceptable distribution of
income and wealth in society. This could be subjective.

Question 10

Causes of income and wealth inequality within and between countries

Answer 10

wage inequality- underemployment and differences between sectors
welfare payments/ taxes- increase at a slower rate than wages and some taxes are regressive
unemployment- leads to poverty
marginalisation eg gender race
wars or natural disasters
economic development

Question 11

kuznets theory

Answer 11

states that as society moves from agriculture to industry, so it
develops, inequality within society increases, since the wages of industrial workers
rises faster than farmers
Then, wealth is redistributed through government transfers and education

Question 12

absolute poverty

Answer 12

defined as living below subsistence. This means that the person is
unable to meet their basic needs of food, clean water, sanitation, health, shelter and
education. The World Bank uses a measurement based on the number of people living on
less than $1.25 per day.

Question 13

relative poverty

Answer 13

measured by comparison to the average in the country. In the UK, those
with below 60% of the median income are considered to be in relative poverty.

Question 14

causes of poverty

Answer 14

stagnation leading to unemployment
skills gaps/ eduvation deficits
political instability
extreme weather
lack access to healthcare
rapid population growth
poor infrastructure

Question 15

impacts of poverty

Answer 15

lower life expectancy
malnutrition
less skills so less productive
social unrest
poor sanitation
lack education
cannot get high skill job

Question 16

gov policies to reduce poverty and inequality

Answer 16

progressive taxation
inheritance and estate taxes
minimum wage legislation
state provision of education and health care
welfare benefits