distribution of Income and wealth

Cards (34)

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