Inequality

Question 1

4 Measures to reduce income inequality?

Answer 1

1. Education, healthcare, infra
2. NMW + Max wage
3. Progressive tax + redistribution
4. Immigration policy

Question 2

Reasons for income inequality in the UK. (5)

Answer 2

1. 2008 financial crisis - higher tax, gig economy, unemployment
2. Deindustrialisation - unemployment, low productivity, regional
3. Regressive tax - 83% - 46%
4. Immigration
5. Earnings of rich skyrocket due to assets, inheritance, growth, scope of globalisation

Question 3

Why is income inequality necessary for capitalism?

Answer 3

1. Incentive - incentivises entrepreneurship and progression: profit motive
2. Incentivises education and productivity: work incentive

BUT
- social issues
- economies require the means of progression i.e. educaton

Question 4

Reasons for poverty? (7)

Answer 4

1. No minimum wage: MNC exploitation
2. Regressive tax
3. Government corruption: funds not spent on education or infrastructure
4. War - no FDI
5. Primary product dependency
6. Poverty trap: savings gap, growth and development traps
7. Lack of healthcare - preventable disease

Question 5

How to reduce wealth inequality? (3)

Answer 5

1. Inheritance tax
2. Reduce stamp duty
3. Wealth tax