Inequality

Question 1

Wealth

Answer 1

• a stock of assets or things of value owned by private individuals/governments
• measured at a point in time –> 30th June
• private wealth –> property, houses, shares
• gvrnment/public –> land, buildings, equipment
• wealth is inherited from generation to generation
• POVERTY HURTS EVERYBODY –> PEOPLE DO NOT CHOOSE POVERTY

Question 2

Income

Answer 2

• a flow of money measured over a period of time –> one financial year
• wealth takes longer to accumulate
• POVERTY HURTS EVERYBODY –> PEOPLE DO NOT CHOOSE POVERTY

Question 3

Income Distrubution

Answer 3

• the nation’s income is divided or shared between individuals and income units making up the population

Question 4

Causes of Poverty 1

Answer 4

Unemployment and reduced hours of work:

• unemployment follows a drop in AD –> recession –> when individuals lose their job, they cannot sell labour resources
• the unemployed run down their wealth and use up their assets –> savings/share
• if they are unable to meet home mortgage/other interest repayments, their assets can be repossessed –> lowering share of wealth
• ultimately, material living standards fall

Question 5

Causes of Poverty 2

Answer 5

Rapid inflation
- ordinary working families and retirees on fixed incomes find that their wages and incomes rise less quickly than prices –> paying bills/buying food becomes difficult
-

Question 6

Causes of Poverty 3

Answer 6

Ownership and Inheritance
- income such as interest/rent/dividends/profits also come from the ownership and sale of assets in wealth such as property/shares/bank deposits

Question 7

Causes of Poverty 4

Answer 7

Overseas Economic Condition
- strong economic growth abroad among our trading partners, Aus mineral exporters and their workers find that rising commodity prices and sales cause their incomes to rise, faster than the rest community

Question 8

Causes of Poverty 5

Answer 8

Age

• peak in their income-earning capacity occurs when they are in the 35-49 year-old age group
• the very young find it difficult to get their first job –> youth unemployment is high –> have not had the time to accumulate assets/wealth
• the ages can no longer work`–> assets are inadequate

Question 9

Causes of Poverty 6

Answer 9

Low Educational Attainment

• those with no formal education usually have incomes 40+ per cent lower than those with tertiary qualifications
• labour market usually values educated people more highly that those without such training

Question 10

Causes of Poverty 7

Answer 10

Discrimination
- existence of discrimination in employment – some individuals aren’t given the same opportunities to earn income and enjoy reasonable living standards

Question 11

Causes of Poverty 8

Answer 11

Luck
- some people have a lucky streak in them and stumble onto fortune –> lottery winners –> free childcare from grandparents

Question 12

Causes of Poverty 9

Answer 12

Government Policies

- GST increases income inequality – increases the price of g/s –> people with a lower income can’t afford this