Unit 7 - The Distribution Of Income And Wealth: Poverry And Inequality Flashcards
Distribution of income
How income is divided between rich and poor, or between different groups in society, e.g. on a regional, age or gender basis.
Distribution of wealth
How wealth is divided between rich and poor, or between different groups in society, e.g. on a regional, age or gender basis.
Income
Personal or household income is the flow of money a Person or household receives In a particular time period.
Wealth
Personal wealth is the stock of everything that a person or household owns at a particular point in time which has value.
Equality
When everyone is treated exactly the same. A completely equal distribution of income means that everybody has the same income.
Equity
When everyone is treated fairly.
Lorenz curve
A graph in which the cumulative percentage of total national income or wealth is plotted against the cumulative percentage of population (ranked in increasing size of share). The extent to which the curve dips below a straight diagonal line indicates the degree of inequality of distribution.
Gini coefficient.
Measures the extent to which the distribution of income or wealth among individuals or households within an economy deviates from a perfectly equal distribution.
Progressive taxation
A tax is progressive when, as income rises, a greater proportion of income is paid in taxation. The term can be applied to a particular tax such as income tax or taxation in general.
Absolute poverty
A condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services.
Relative poverty
Occurs when income is below a specified proportion of average income, e.g. below 60% of median income
Poverty
The state of being extremely poor and not having enough money or income to meet basic needs.
