Part 1.5: The distribution of income and wealth - poverty and inequality

Alex Maas
Flashcards by Alex Maas, updated more than 1 year ago


A2 Economics Flashcards on Part 1.5: The distribution of income and wealth - poverty and inequality, created by Alex Maas on 03/01/2017.

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Question Answer
Distribution of income How income is divided between rich and poor, or between different groups in society.
Distribution of wealth How wealth is divided between rich and poor, or between different groups in society.
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 which has value that a person or household owns at a particular point in time.
Equality Means that everyone is treated exactly the same. A completely equal distribution of income means that everybody has the same income.
Equity Means that everybody is treated fairly.
Lorenz curve A graph on which the cumulative percentage of total national income or wealth is plotted against the cumulative share of population. The extent to which the curve dips below the line of equality 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.
Poverty The state of being extremely poor and not having enough money or income to meet basic needs.
Absolute poverty A condition characterised by severe deprivation of basic human needs. Depends on both income and access to services.
Relative poverty Occurs when income is below a specified proportion of average income.
Marginal tax rates The tax rate levied on the last pound of income received. The term can be applied solely to income taxes or to all the taxes a person or business pays.
Means-tested benefits The ability to claim these benefits depends on a person's income or means.
Universal benefits Benefits claimable of right and not dependent on a person's income.
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