Government policies to alleviate poverty and to influence the distribution of wealth income

Question 1

Factors that influence the spread of income

Answer 1

-Human capital-Value of your skills leads to a range of incomes
-Labour mobility-how transferrable your skills are from one job to another affected by geography and human capital
-Wealth-can generate incomes such as rent and dividends
-Government-Taking in the form of taxes and giving in the form of benefits/public services

Question 2

Income redistribution

Answer 2

A practice designed to level incomes across a society through the transfer of incomes from wealthier to poorer individuals.

Question 3

Tax sources

Answer 3

-VAT
-Excise duties
-Income taxes
-Dividends tax

Question 4

Redistribution examples

Answer 4

-Subsidies
-Benefits
-Education spending
-Welfare
-NHS

Question 5

Excise duties

Answer 5

A tax on demerit goods to reduce its demand

Question 6

Corporation tax

Answer 6

A tax on firms profits

Question 7

Capital gains tax

Answer 7

Tax on the sale of wealth sources such as property

Question 8

Consequences of differences in the distribution of income and wealth

Answer 8

-More crime
-Social tensions
-Reduced happiness