ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Economic inequality is the unequal distribution of income and opportunity between different groups in society. It is a concern in almost all countries around the world and often people are trapped in poverty with little chance to climb up the social ladder.

Detailed explanation-2: -Some of key factors behind the increase in within-country income inequality noted in the literature include technological progress, globalization, commodity price cycles, and domestic economic policies such as redistributive fiscal policies, labor and product market policies.

Detailed explanation-3: -Thus, rising inequality impedes economic growth by reducing the average amount of physical capital investment and human capital accumulation. On the other hand, high-income groups are a major part of society’s wealth, and if they invest in it primarily, it will promote economic growth (Bourguignon, 1981. (1981).

Detailed explanation-4: -Income inequality is how unevenly income is distributed throughout a population. The less equal the distribution, the higher income inequality is. Income inequality is often accompanied by wealth inequality, which is the uneven distribution of wealth.