Redistribution of Income Flashcards
1
Q
Income inequality
A
Differences in income that exist between the different groups of earners in society, that is, the gap between the rich and the poor
2
Q
What is the Lorenz curve
A
Graphical representation of the degree of income of wealth or wealth inequality in a country
3
Q
Absolutely poverty
A
When people do not have enough resources to meet all of their basic human needs
4
Q
Relative poverty
A
Poverty that is defined relative to existing living standards for the average individual
5
Q
Reasons to reduce absolute poverty
A
- Ethical reasons
- Improve living standards
- Meet basic needs
6
Q
Gov regulation to reduce poverty
A
- Progressive taxation
- Redistribution through benefit payments
- Investment in education and healthcare
7
Q
Progressive taxation
A
Where the proportion of income paid in tax rises as the income of the taxpayer rises
8
Q
Regressive taxation
A
Tax system that places the burden of the tax more heavily on the poor
