Lecture 5

Question 1

what is operationalization?

Answer 1

turning abstract concepts into measurable observations

Question 2

what is the Dunning-Kruger effect?

Answer 2

when people with limited knowledge overestimate the amount of knowledge they have

Question 3

what is inflation?

Answer 3

rate of increase of prices over a period of time

Question 4

what is average income?

Answer 4

total score divided by the number of scores

Question 5

what is median income?

Answer 5

ranking all scores from least to greatest then finding the middle score

Question 6

why is median income preferred over average income?

Answer 6

rich people calculated in the average income is more likely to skew the results

Question 6

what are the two types of income?

Answer 6

1. active income
2. passive income

Question 7

what is active income?

Answer 7

income received by performing a service

Question 8

what is passive income?

Answer 8

income not tied to active labour like stock market

Question 9

why is it important to learn about passive income through the stock market?

Answer 9

1. important to know in real life
2. help understand how the rich stay rich

Question 10

what is the Matthew effect?

Answer 10

those who begin with advantages accumulate more and more advantages

Question 11

what are ascribed statuses?

Answer 11

status given at birth

Question 11

what are assigned statuses?

Answer 11

status assigned at birth

Question 12

what are income quintiles used for?

Answer 12

to study how income has changed over time for people of different socioeconomic classes

Question 13

what is before tax or market income?

Answer 13

new earnings earned before taxes

Question 14

what is after-tax income?

Answer 14

measure of income after taxes are paid

Question 15

what is the GINI coefficient used for?

Answer 15

measure of how the income in society deviates from the equal distribution of income

Question 16

what does a score of 0 or 1 mean in the GINI coefficient?

Answer 16

0 means income is equally distributed in society whereas 1 means income distribution is completely unequal

Question 17

why have the rich gained so much?
RBC

Answer 17

1. the rich tend to get richer
2. workers losing bargaining power
3. corporate consolidation causes fewer small business owners

Question 18

what are labour unions?

Answer 18

organization from a particular trade made to fight for better working rights

Question 19

what is oligopoly?

Answer 19

when a small number of businesses control the market resulting in competitors’ price-matching in mutually beneficial ways

Question 20

what are the two main reasons for inequality growing with little response?

Answer 20

1. growth of two-income households
2. access to loans and debt

Question 20

why has inequality risen?

Answer 20

globalization

Question 21

how has inequality risen?

Answer 21

1. wealth
2. access to loans

Question 22

what is wealth?

Answer 22

another word for net worth which is assets (money earned) minus liabilities (loans)

Question 23

what are assets?

Answer 23

something that holds value

Question 24

what are liabilities?

Answer 24

something that can potentially takes away value

Question 25

back then, how was debt viewed?

Answer 25

poorly

Question 26

what is absolute poverty?

Answer 26

when the subject lacks the means to meet basic needs

Question 26

what is invisible inequality?

Answer 26

inequality that can only be known if someone told you about it

Question 27

what is relative poverty?

Answer 27

how poor someone is relative to someone else

Question 27

what is extreme poverty?

Answer 27

living on less than 1.25 dollars a day