Macro economic objectives - Inequality Flashcards
what is the distribution of income
how income is shared amongst the population in terms of individuals and households
what is income
reward earned for providing a service e.g. wage from labour and rent for providing premises
what is wealth
the market value of assets owned by individuals and households
what is a flow
money going to factors of production
what is a stock
large amount of money or valuable possessions held by individuals and households
what is interests classified as
a flow and income
what are savings classified as
a stock and wealth
What causes inequality and poor distribution (6)
Age
Gender
Labour markets
Reliance on Benefits
Wealth inequality
Tax status e.g. regressive/progressive
How do labour markets control wages
through supply and demand
e.g demand high for job then increased wage
How do government aim to reduce wealth inequality
welfare state
What causes wealth inequality
inheritance
savings
investments
taxes
What are the consequences of inequality (5)
poverty increase
poor housing
poor health
social issues
lower economic growth
What are the potential benefits of inequality
trickle down effect since easier to spend for big businesses
incentive for poor to work
What are the 4 gov policies to reduce inequality
Fiscal
Monetary
Benefits
National minimum wage
