Chapter 7 Flashcards
1
Q
What are the 5 causes of poverty?
A
Old age
Regressive taxes
Unemployment
Relatively low wages
Imperfect info
2
Q
What are the 2 cons of income and wealth inequality?
A
Social tensions
The creation of an ‘underclass’
3
Q
What are the 2 benefits of income and wealth inequality?
A
Trickle down effect
Increased incentives
4
Q
How is wealth and income linked?
A
Those on high incomes save more, so become wealthier
Those on low incomes borrow more, so become poorer
5
Q
What are 3 effects of poverty?
A
Greater demanded on the welfare system
Poor educational attainment
Poor health
6
Q
What are the 6 policies to influence the distribution of income/wealth and to alleviate poverty?
A
Progressive taxes
NMW
Welfare benefits
Reducing unemployment
Education and training
Promoting ‘trickle down’
