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Economics A level Edexcel > ECON 4 Wealth & Inequality > Flashcards

ECON 4 Wealth & Inequality Flashcards

1
Q

what is equity

A

the quality of being fair or equal

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2
Q

3 causes of inequality

A

earned income (race, age, gender etc)government policycompetition

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3
Q

4 types of wealth

A

physical (antiques etc)propertyprivate pension wealthfinancial

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4
Q

key cause in inequality for wealth

A

inheritance

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5
Q

formula for gini coeffecient

A

a/(a+b) *100

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6
Q

value for absolute poverty

A

less than $1.90

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7
Q

relative income figure

A

less than 60% median income

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8
Q

3 causes of poverty

A

lack of human capitaldependencyinfrastructure

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9
Q

what is the poverty cycle

A

concept that poverty causes poverty

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10
Q

what is horizontal equity

A

equal treatment of people in the same situation (regardless of age race gender etc)

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11
Q

What is vertical equity

A

different treatment of indivuduals to promote equity (e.g. progressive taxes)

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12
Q

3 types of taxation

A

progressive regressivepropotional

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13
Q

6 policies to reduce inequality

A

Minimum/maximum wagesForced benefits to workersEqual pay legislationTrade unionsPrice controls on necessitiesGoods provided on an income basis

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14
Q

key disadvantage of taxation

A

lowers incentive to work

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15
Q

Trickle down effect

A

high wealth in individuals creates jobs

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16
Q

6 development classifications

A

incomedeveloped, developing, less developedworlds modelNICsBRICsTiger economies

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17
Q

what are the tiger economices

A

South Korea, Singapore, Taiwan

18
Q

Why doesn’t growth correlate with development?

A

other factors can influence, inequlity, corruption, lack of social mobility

19
Q

three variables of HDI

A

GNI pc at PPPeducation - mean years life expectancy at birth

20
Q

What is a hard commodity?

A

Something that is mined or extracted

21
Q

What is a soft commodity

A

something that is grown or raised

22
Q

why are commodity prices so volatile

A

very inelastic demand and supply, which mean small changes cause big changes in price

23
Q

What is the prebisch singer hypothesis

A

Over the long term, as commodities don’t rise in value as much as technology and other processed materials, the terms of trade of countries with primary product dependency deteriorates

24
Q

What is the IHDI

A

Inequality-adjusted HDI(uses atkinson index)

25
Q

How many indicators does the genuine progress indicator have and what are the three categories of these

A

26Social, economic, environmental

26
Q

What is the MPI

A

Multidimensional poverty index 10 indicators

27
Q

What is the resource curse

A

Countries have an abundance of natural resources but do not develop

28
Q

Why do primary product dependent countries struggle with prices

A

very volatilemakes planning and investment difficult

29
Q

what is dutch disease

A

Country becomes a significant exporter of a resource in short space of time, which appreciates exchange rate, eroding competitiveness

30
Q

What is the harrod-domar model

A

change in Y/Y=s/ks is savings ratiok is capital output ratio

31
Q

What is the savings cycle

A

low savingslow investmentlow capital accumulationlow incomes

32
Q

What is the savings gap

A

the difference between actual savings and the savings needed to finance investment for higher growth

33
Q

What is a foreign exchange gap

A

difference between exports and the exports needed to finance higher growth

34
Q

What is capital flight

A

Money is sent abroad to be saved

35
Q

What is the Malthusian trap

A

Population grows before agricultural growth, results in inadequate food–> can be extended to energy

36
Q

What is microfinance

A

very small loans given to poor groups to allow them to invest

37
Q

What is often a missing market in developing countries

A

absence of a financial sector

38
Q

what does the kuznets curve show

A

Level of envronmental degradation and the industrialisation of a nation

39
Q

What can lead to underemployment

A

Over-education can lead to underemployment

40
Q

what is a brain drain

A

better educated memebers of the workforce leave to countries with better opportunities

41
Q

What is rent seeking

A

behaviour which attempts to increase share of existing pot of wealth rather than creating higher income/wealth

42
Q

What is dead capital

A

Poorer people not being able to use their assets (like land) as collateral for loans

Economics A level Edexcel (18 decks)

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