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Economics Labour markets Yr2
distribution of Income and wealth
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Amina
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Cards (34)
What type of concept is income?
Flow concept
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How is income typically measured?
Over a given
period
of time
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What type of concept is wealth?
Stock concept
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How is wealth measured?
At a given point in
time
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What constitutes wealth?
Assets
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What is a key characteristic of assets?
Anything with a
market value
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What function can assets perform in addition to holding market value?
Generate
income
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How do pensions contribute to an individual's wealth?
By generating
income
over time
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What is the relationship between income and wealth?
They are
mutually
reinforcing
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What is the effect of high incomes on wealth accumulation?
It can be used to purchase
assets
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What do assets do in terms of income generation?
Assets
generate
more
incomes
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What is the relationship between being wealthy and having a high income?
They are
positively correlated
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What two concepts are important to understand in the distribution of income and wealth?
Equity
and
equality
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What types of equity should be understood?
Horizontal
and
vertical
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What is a simple reason behind income and wealth differentials?
Age
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How does age relate to earning potential?
Older
people have greater earning potential
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Why might older individuals demand higher wages?
Greater
experience
and skills
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What impact does greater wealth accumulation have on age?
Wealth
accumulation
can be
greater
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What is a key driver of changes in the distribution of income?
Education
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How does having more qualifications impact earning potential?
It increases earning potential
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What is the general relationship between education and income?
More
education
,
higher
income
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How does ownership of assets lead to unequal distributions of wealth?
Asset owners
are better off
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What role can employers play in wealth distribution?
Providing access to
pension schemes
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How does property ownership affect wealth?
It leads to
wealth accumulation
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What happens to the distribution of wealth over time with rising property prices?
It gets more
unequal
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How does inheritance affect the distribution of wealth?
It
worsens
the
distribution
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What is the effect of inherited assets generating income?
It worsens the
distribution
of income
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How do wage differentials contribute to unequal distributions of income?
They increase
inequality
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How does state intervention affect wage differentials?
Provides
benefits
and minimum wages
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What is the state's goal in providing benefits or minimum wages?
To
help close the gap
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What is an important topic related to the distribution of income and wealth?
Policies to
redistribute
income
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What can be done with assets?
Bought
and
sold
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What is a characteristic of labor markets in societies?
They are not
perfect
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What role do wage differentials play in income distribution?
Big Driver of
unequal distributions
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