Income and Wealth Inequality: Causes and Consequences

What is the primary difference between income and wealth?

• Income is a stock, while wealth is a flow.

• Income is a flow, while wealth is a stock.

• Both income and wealth are stocks.

• Both income and wealth are flows.

How is inequality defined in terms of income and wealth distribution?

• Everyone has the same income and wealth.

• Different individuals have different stocks of wealth and income flows.

• Everyone has different income but the same wealth.

• Everyone has the same income but different wealth.

What is the income level at the 90th percentile in the UK according to the video?

• £150,000 a year

• £50,000 a year

• £75,000 a year

• £100,000 a year

Why might low income and wealth prevent someone from participating in the labor force?

• They are overqualified for available jobs.

• They may lack access to education and job interview attire.

• They can afford all necessary resources.

• They have too much wealth to need a job.

What is one potential consequence of not being able to afford basic medicine?

• Increased personal savings

• Reduced government spending

• Improved health outcomes

• Development of more severe illnesses

How can inequality lead to market failure?

• By ensuring equal resource allocation

• By causing misallocation of resources

• By increasing consumer spending

• By reducing government intervention

What is one method mentioned to prevent market failure due to inequality?

• Increasing welfare payments

• Decreasing benefits for the poor

• Reducing taxes on the rich

• Eliminating transfer payments