Macro A2 - Inequality

Question 1

Wealth inequality

Answer 1

When wealth is distributed unequally throughout a economy or population.

Question 2

Income inequality

Answer 2

When income is distributed unequally throughout a economy or population.

Question 3

Lorenz curve

Answer 3

• The lorenz curve shows how income/wealth is distributed throughout a economy.
• The further away from perfect equality it is the less equal society is.

Question 4

Gini coefficient

Answer 4

A / A+B = gini coefficient. This figure represents the income/wealth inequality within a nation.

Question 5

Causes of income inequality

Answer 5

• technological progress
• globalisation
• commodity price cycles
• domestic economic policies such as redistributive fiscal policies
• labor and product market policies.

Question 6

Causes of wealth inequality

Answer 6

• Technological progress
• Globalisation
• Commodity price cycles
• Domestic economic policies such as redistributive fiscal policies
  -Labor
  -Product market policies.

Question 7

What is the impact of economic change and development on inequality?

Answer 7

as a country develops and its GDP grows from a subsistence economy, inequality initially increases and then decreases.

Question 8

How does capitalism effect inequality?

Answer 8

Therefore those who inherit capital can enjoy high income even without any effort. They have access to the best private education and jobs. This creates inequality of opportunity as well as inequality of outcome