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13 Cards in this Set
- Front
- Back
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Absolute poverty |
When a persons continued daily existence is threatened because they have insufficient resources to meet their basic needs ($1.90 a day) |
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Relative poverty |
When someone is poor compared with others in their society |
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5 causes of changes in absolute poverty |
-foreign aid -debt relief -micro finance schemes -changes in rate of economic growth -FDI |
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Inequality of wealth |
Differences within a society of the stock of assets that people own |
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Income inequality |
Differences within a society of what income flows people are receiving |
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Lorenz curve |
Curve which shows cumulative share of income against the cumulative share of the population with that income |
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Gini coefficient |
A statistical measure of inequality that works by comparing how distribution of income in a society compares to a society in which everyone earns the exact same. 1=all of income is held by one person 0=complete equality of income |
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8 causes of income inequality within and between countries and potential limitations |
-education and skills -wage rate/ minimum wage -strength of trade unions -degree of employment protection -pension entitlements -ownership of assets -access to benefits -how progressive the tax system is |
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Progressive tax system |
Higher earners pay a higher percentage of their income in tax than lower earners |
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Regressive tax systems |
Low earners pay a higher percentage of their income in tax than high earners |
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Proportional tax system |
All earners pay an identical percentage of their income in tax |
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Capitalism |
An economic system based upon private ownership of the means of production and their operation for profit |
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Three reasons inequality in a capitalist society is seen as inevitable |
-private property -price mechanism -labour markets |
