Economics · Unit 3: Macroeconomics

EC3.4 — Economics of inequality and poverty

Economics · SL / HL · syllabus-mapped notes

1. EC3.4.1

   Relationship between equality and equity

   Explain the difference between equality and equity, and why the two are often treated as one.

2. EC3.4.2

   The meaning of economic inequality

   Explain economic inequality as the unequal distribution of both income and wealth.

3. EC3.4.3

   Measuring economic inequality

   Draw and interpret a Lorenz curve, and calculate and interpret the Gini coefficient.

4. EC3.4.4

   Meaning of poverty

   Explain what poverty means, and distinguish absolute from relative poverty.

5. EC3.4.5

   Measuring poverty

   Explain the single and composite indicators used to measure poverty, including the Multidimensional Poverty Index.

6. EC3.4.6

   Difficulties in measuring poverty

   Explain why poverty is difficult to measure reliably.

7. EC3.4.7

   Causes of economic inequality and poverty, including:

   Explain the causes of inequality and poverty, from unequal opportunity and resource ownership to discrimination and unequal status.

8. EC3.4.8

   The impact of income and wealth inequality on:

   Evaluate what income and wealth inequality do to economic growth, living standards and social stability.

9. EC3.4.9

   The role of taxation in reducing poverty, income and wealth inequalities

   Evaluate how progressive, regressive and proportional taxes, direct and indirect, affect poverty and inequality.

10. EC3.4.10

    Further policies to reduce poverty, income and wealth inequality, including:

    Evaluate the other policies used against poverty and inequality, investment in human capital, transfer payments, targeted spending and minimum wages.