Income And Wealth

Question 1

Define income

Answer 1

Income is the money or value received by an individual household or organisation in exchange for providing labour, producing goods and services or investing capital over specific period of time

Question 2

Define wealth

Answer 2

Wealth is the total value of all assets owned by an individual, household, company, or country minus all liabilities

Question 3

Explain the relation of wealth to income and income to wealth

Answer 3

1.How income builds wealth;
-earning income, and saving it rather than spending it immediately, in the form of stocks, and banks can grow in value
-investing into education, health and skills lead to higher potential.

2. How wealth builds income;
   -income can be generated from Wealth through investment returns, in invested businesses that generate profits, stocks or bonds.

Question 4

What is uneven income distribution?

Answer 4

Uneven income distribution refers to the way income is spread out amongst people in a society, where not everyone earns the same amount of money

Question 5

Why does uneven income distribution happen?

Answer 5

-higher and lower levels of education
-Different opportunities because of background
-inheritance
Discrimination?

Question 6

What are the three types of taxes?

Answer 6

• Progressive tax. when marginal tax rates increased income
• regressive tax. Marginal tax rate decrease as income increases.
• Proportional tax. Marginal rate of tax is proportional, a constant in relation to income.

Question 7

How do taxes affect income distribution?

Answer 7

-Progressive tax helps reduce income inequality
-Regressive tax increases income inequality
-Proportional tax has a neutral effect, but might not address income inequality effectively

Question 8

How does government spending effect income distribution

Answer 8

• When the government spends on social projects and public services to help reduce income inequality by supporting lower income groups

-Government spending and boost economic growth by creating jobs and stimulating demand, would you benefits to overall economy

Question 9

What is uneven wealth distribution

Answer 9

uneven wealth distribution refers to the way wealth is spread out amongst people in a society, where some people have a lot of wealth, whilst other people have very little

Question 10

How do government policies help reduce uneven wealth distribution for vulnerable groups

Answer 10

-programs like free or reduced school cost meals and scholarships ensure young people from low income Families have access to education and nutrition.
-pensions and health care services, help older adults, who may no longer be able to work
-Funding for accessibility features and disability benefits help disabled individuals