ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Inequality in the distribution of wealth may be explained by differences in work effort, ability, savings behavior, rates of return, taxes and transfers, and gift and bequests (private transfers). The relative importance of these factors has important implications for public policy.

Detailed explanation-2: -Causes for wealth inequality in the United States include differences in income, education, labor market demand and supply, among a variety of others.

Detailed explanation-3: -High tax rates are responsible for inequality in the distribution of income and wealth. This is due to undue concentration of incomes in a few hands caused by large-scale tax evasion.

Detailed explanation-4: -The uneven distribution of wealth in the 1920’s existed on many levels. Money was distributed disparately between the rich and the middle-class, between industry and agriculture within the United States, and between the U.S. and Europe. This imbalance of wealth created an unstable economy.