inequality

Question 1

factors that determine the levels of inequality within an economy

Answer 1

• differences in earnings(different level of education)
• government policies to redistribute wealth
• inheritance

Question 2

UK context

Answer 2

in 2019 it had a Gini coefficient of 0.35

Question 3

what approach can the government take to improve inequality

Answer 3

• expansionary fiscal and monetary (focus on the demand side and increase investment)
• supply side policies to increase productive potential of an economy (investment in education improves skills)
• redistributing incomes progressive tax system(increase the levels of incomes of those on fixed incomes with line with inflation and increasing welfare payments)

Question 4

what are the arguments for aid

Answer 4

• human decency
• positive working relationships
• peace and stability

Question 5

arguments against aid

Answer 5

• subsituting for domestic savings and investment
• widening inequality gap if aid is poorly managed and distributed

Question 6

what is meant by capital expenditure

Answer 6

spending on assets that provide long-term benefits to the economy

Question 7

what is meant by current spending

Answer 7

involves day to day spending o-n things like salaries and operational costs

Question 8

what is meant by trnsfer payments

Answer 8

payments made by government without receing any benefits back such as social security and welfare benefits

Question 9

what is an example of a benefit payment which was provided by the government in times of economical crisis

Answer 9

Furlough Scheme

Question 10

what are some reasons for government expenditure

Answer 10

• funding public services
• infrastructure
• welfare programs
• education

Question 11

what are the key points that need to be achieved in order to shift LR Phillips Curve to the left

Answer 11

increasing efficiency of the labour market

Question 12

what are the policies that can be used to reduce voluntary unemployment

Answer 12

• reform welfare benefits
• reform trade unions (reduce collective bargaining power)
• reducing barries to labou mobility
• reducingincopme tax(increase incentive to work)
• gov policies to make labour more competitive and flexible

Question 13

what is cyclical deficit

Answer 13

budget deficit as a result of fluctuations in the economic cycle

Question 14

what is a structural deficit

Answer 14

results from a core imbalance between public spending and taxation

Question 15

how to tackle structural deficit

Answer 15

• higher taxation
• spending less