Poverty and Income Distribution

These flashcards cover key vocabulary and concepts related to poverty and income distribution, providing definitions and explanations for better understanding and exam preparation.

Income

A flow measure reflecting the funds received by individuals or businesses over a specific period.

Wealth

A measure of an individual’s or family’s assets, net of liabilities, at a given time.

Functional distribution of income

The way in which income is distributed according to the factors of production.

Personal or family distribution of income

The distribution of income to individuals or household groups, typically by quintiles.

Lorenz Curve

A graphical measure of income inequality that shows the cumulative share of total income earned by cumulative percentages of the population.

Gini Coefficient

A ratio that measures income inequality, ranging from 0 (perfect equality) to 1 (perfect inequality).

Poverty Thresholds

Income levels set by the government to define the minimum income necessary to secure basic needs.

Poverty Rate

The percentage of the population living below the poverty line.

Income Deficit

The difference between the income that a household needs to achieve a standard of living and the income it actually has.

Ratio of income to poverty

A measure comparing an individual's or household's income to the poverty line.

Progressive Taxation

A tax system in which the tax rate increases as the taxable amount increases.

Redistribution

The process of reallocating income and wealth from richer members of society to poorer members.

Food Insecurity

The state of being without reliable access to a sufficient quantity of affordable, nutritious food.

Poverty Guidelines

A measure issued by the Department of Health and Human Services to determine eligibility for federal programs.

Social Security

A government program that provides monetary assistance to people with an inadequate or no income.

Income Inequality

The unequal distribution of income within a population.

Quota System

A system that establishes a percentage or fixed number of individuals from certain categories that must be included.

Nozick’s Argument

An argument opposing wealth redistribution, asserting that it is unjust to redistribute earned wealth.

Rawls’ Maximin Principle

A concept suggesting that society should maximize the welfare of the least well-off individuals.