ECONOMICS
INCOME DISTRIBUTION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The way producers pay their staff
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How incomes are shared out between individuals and households
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The way the government makes money
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None of the above
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Detailed explanation-1: -The distribution of income is simply a statistical measure of how many people earn or receive various amounts of income. However, people, including many economists, often mistakenly talk as if society is “distributing” income and people are passively receiving it.
Detailed explanation-2: -The two types of income distribution are equal and unequal income distribution.
Detailed explanation-3: -The term “income distribution” is a statistical concept. No one person is distributing income. Rather, the income distribution arises from people’s decisions about work, saving, and investment as they interact through markets and are affected by the tax system.
Detailed explanation-4: -When people say things such as “the rich get richer, and the poor get poorer, ” they are referring to distribution of income. It describes how all the money (income) earned in a nation is divided among people of various income levels.