86:I[871206,["$1","$2","$3","$4","$5","$6","$7","$8","$9","$a","$b","$c","$d","$e","$f","$10","$11","$12","$13","$14","$15"],"IconMark"] 87:I[196793,["$1","$2","$3","$4","$5","$6","$7","$8","$9","$a","$b","$c","$d","$e","$f","$10","$11","$12","$13","$14","$15","$3b","$3c","$3d","$3e","$3f","$40","$41","$42","$43","$44","$45","$46","$47","$48","$49","$4a","$51","$52","$53","$54","$55","$56","$57","$58","$59","$5a","$5b","$5c","$5d","$5e","$5f","$60","$61","$62","$63","$64","$65","$66","$67","$68","$69","$6a","$6b","$6c","$6d"],"Gingerbread"] 89:"RecordResourceResume" 8a:I[647935,["$1","$2","$3","$4","$5","$6","$7","$8","$9","$a","$b","$c","$d","$e","$f","$10","$11","$12","$13","$14","$15","$3b","$3c","$3d","$3e","$3f","$40","$41","$42","$43","$44","$45","$46","$47","$48","$49","$4a","$51","$52","$53","$54","$55","$56","$57","$58","$59","$5a","$5b","$5c","$5d","$5e","$5f","$60","$61","$62","$63","$64","$65","$66","$67","$68","$69","$6a","$6b","$6c","$6d"],"$89"] 8b:I[473028,["$1","$2","$3","$4","$5","$6","$7","$8","$9","$a","$b","$c","$d","$e","$f","$10","$11","$12","$13","$14","$15","$3b","$3c","$3d","$3e","$3f","$40","$41","$42","$43","$44","$45","$46","$47","$48","$49","$4a","$51","$52","$53","$54","$55","$56","$57","$58","$59","$5a","$5b","$5c","$5d","$5e","$5f","$60","$61","$62","$63","$64","$65","$66","$67","$68","$69","$6a","$6b","$6c","$6d"],"RecordTopicView"] 8c:"FlashcardAccessBranch" 8d:I[830476,["$1","$2","$3","$4","$5","$6","$7","$8","$9","$a","$b","$c","$d","$e","$f","$10","$11","$12","$13","$14","$15","$3b","$3c","$3d","$3e","$3f","$40","$41","$42","$43","$44","$45","$46","$47","$48","$49","$4a","$51","$52","$53","$54","$55","$56","$57","$58","$59","$5a","$5b","$5c","$5d","$5e","$5f","$60","$61","$62","$63","$64","$65","$66","$67","$68","$69","$6a","$6b","$6c","$6d"],"$8c"] 8e:"TopicFlashcardRunner" 8f:I[315438,["$1","$2","$3","$4","$5","$6","$7","$8","$9","$a","$b","$c","$d","$e","$f","$10","$11","$12","$13","$14","$15","$3b","$3c","$3d","$3e","$3f","$40","$41","$42","$43","$44","$45","$46","$47","$48","$49","$4a","$51","$52","$53","$54","$55","$56","$57","$58","$59","$5a","$5b","$5c","$5d","$5e","$5f","$60","$61","$62","$63","$64","$65","$66","$67","$68","$69","$6a","$6b","$6c","$6d"],"$8e"] 74:null 7a:[["$","title","0",{"children":"3.3 Fair distribution of income - Flashcards | MathsGenie"}],["$","meta","1",{"name":"description","content":"Revise 3.3 Fair distribution of income for OCR GCSE Economics with active-recall flashcards: flip, fill the gaps, and self-test on MathsGenie."}],["$","meta","2",{"name":"application-name","content":"MathsGenie"}],["$","meta","3",{"name":"robots","content":"index, follow"}],["$","link","4",{"rel":"canonical","href":"https://mathsgenie.co.uk/gcse/economics/ocr/fair-distribution-of-income/flashcards"}],["$","meta","5",{"property":"og:title","content":"3.3 Fair distribution of income - Flashcards"}],["$","meta","6",{"property":"og:description","content":"Revise 3.3 Fair distribution of income for OCR GCSE Economics with active-recall flashcards: flip, fill the gaps, and self-test on MathsGenie."}],["$","meta","7",{"property":"og:url","content":"https://mathsgenie.co.uk/gcse/economics/ocr/fair-distribution-of-income/flashcards"}],["$","meta","8",{"property":"og:site_name","content":"MathsGenie"}],["$","meta","9",{"property":"og:locale","content":"en_GB"}],["$","meta","10",{"property":"og:image","content":"https://mathsgenie.co.uk/api/og?title=3.3%20Fair%20distribution%20of%20income%20-%20Flashcards"}],["$","meta","11",{"property":"og:image:width","content":"1200"}],["$","meta","12",{"property":"og:image:height","content":"630"}],["$","meta","13",{"property":"og:image:alt","content":"3.3 Fair distribution of income - Flashcards"}],["$","meta","14",{"property":"og:type","content":"website"}],["$","meta","15",{"name":"twitter:card","content":"summary_large_image"}],["$","meta","16",{"name":"twitter:title","content":"3.3 Fair distribution of income - Flashcards"}],["$","meta","17",{"name":"twitter:description","content":"Revise 3.3 Fair distribution of income for OCR GCSE Economics with active-recall flashcards: flip, fill the gaps, and self-test on MathsGenie."}],["$","meta","18",{"name":"twitter:image","content":"https://mathsgenie.co.uk/api/og?title=3.3%20Fair%20distribution%20of%20income%20-%20Flashcards"}],["$","link","19",{"rel":"icon","href":"/favicon.ico?favicon.2j0dv-gmf2vmi.ico?dpl=nogit-1793871986","sizes":"256x256","type":"image/x-icon"}],["$","link","20",{"rel":"icon","href":"/icon.svg?icon.0odudpcuyu_1t.svg?dpl=nogit-1793871986","sizes":"any","type":"image/svg+xml"}],["$","link","21",{"rel":"apple-touch-icon","href":"/apple-icon.png?apple-icon.3cq-u4n9i7l9o.png?dpl=nogit-1793871986","sizes":"180x180","type":"image/png"}],["$","$L86","22",{}]] 71:[["$","$L87",null,{"feature":"flashcards"}],"$L88",["$","$L8a",null,{"href":"/gcse/economics/ocr/fair-distribution-of-income/flashcards","label":"3.3 Fair distribution of income","subjectCode":"gcse_economics__ocr","surface":"flashcards"}],["$","$L8b",null,{"kind":"flashcards","topicId":"edffaa95-f4b8-5924-8ce3-f53c42be3b2c"}],["$","$L8d",null,{"runner":["$","div",null,{"className":"min-h-0 flex-1 overflow-hidden bg-background","children":["$","$L8f",null,{"decks":[{"id":"2cbbbb61-0e7b-4c9f-a53e-a69736c106c3","title":"Fair distribution of income Flashcards","topicId":"edffaa95-f4b8-5924-8ce3-f53c42be3b2c","topicSlug":"fair-distribution-of-income","cards":[{"id":"2249d912-03ed-4b6f-b2b9-2824a1bdf843","cardType":"cloze","points":null,"front":"The distribution of income is the way total income is [ ] in an economy.","back":"The distribution of income is the way total income is shared between people or households in an economy.","mcqOptions":[{"text":"shared between people or households","correct":true,"explanation":"Income distribution describes how the total income generated in an economy is allocated among different people or households."},{"text":"collected by the government","correct":false,"explanation":"‘Collected by the government’ refers to tax revenue, not how income is allocated across households. The correct term is ‘shared between people or households’."},{"text":"produced by businesses","correct":false,"explanation":"‘Produced by businesses’ describes the creation of goods and services rather than the allocation of income. The correct term is ‘shared between people or households’."},{"text":"saved by individuals","correct":false,"explanation":"‘Saved by individuals’ describes saving income, not its distribution among households. The correct term is ‘shared between people or households’."}]},{"id":"ad5568a4-ba6d-45b6-905c-33ee14e7ba71","cardType":"cloze","points":null,"front":"A fair distribution does not require everyone to receive exactly the same income; it asks whether people have reasonable [ ] and [ ].","back":"A fair distribution does not require everyone to receive exactly the same income; it asks whether people have reasonable living standards and opportunities.","mcqOptions":[{"text":"A fair distribution does not require everyone to receive exactly the same income; it asks whether people have reasonable living standards and opportunities.","correct":true,"explanation":"Fairness is assessed by considering whether people can achieve reasonable living standards and opportunities, rather than requiring identical incomes for everyone."},{"text":"A fair distribution does not require everyone to receive exactly the same income; it asks whether people have reasonable equal incomes and choices.","correct":false,"explanation":"Equal outcomes and identical choices suggest everyone must receive the same result, which the statement rejects. Fairness instead concerns reasonable living standards and opportunities."},{"text":"A fair distribution does not require everyone to receive exactly the same income; it asks whether people have reasonable employment and wages.","correct":false,"explanation":"Employment and wages are related to income, but they do not fully measure whether people can live adequately or access chances to improve their lives. The correct terms are living standards and opportunities."},{"text":"A fair distribution does not require everyone to receive exactly the same income; it asks whether people have reasonable consumption and savings.","correct":false,"explanation":"Consumption and savings describe how income may be used, not the broader outcomes used to judge fairness. The correct terms are living standards and opportunities."}]},{"id":"b88e4586-2d73-4df6-8e0a-56e3b61500a6","cardType":"cloze","points":null,"front":"Income is money received over a [ ], such as a week, month or year.","back":"Income is money received over a period of time, such as a week, month or year.","mcqOptions":[{"text":"period of time","correct":true,"explanation":"Income is measured over a specified duration, such as a week, month or year, so it is a flow measured over a period of time."},{"text":"point in time","correct":false,"explanation":"A point in time identifies a single moment, whereas income is measured as a flow over a duration. The correct term is ‘period of time’."},{"text":"level of wealth","correct":false,"explanation":"A level of wealth refers to accumulated assets, not the duration over which money is received. The correct term is ‘period of time’."},{"text":"unit of output","correct":false,"explanation":"A unit of output measures production rather than the duration for measuring receipts of money. The correct term is ‘period of time’."}]},{"id":"a70ffed7-bbcc-4f7f-aa28-f1be7b52cf12","cardType":"basic","points":1,"front":"Which income type is earned by entrepreneurs or business owners after costs are paid?","back":"Profit.","mcqOptions":[{"text":"Profit.","correct":true,"explanation":"Profit is the income earned by entrepreneurs or business owners after subtracting the costs of production from revenue."},{"text":"Wages.","correct":false,"explanation":"Wages are payments to employees for their labour, not the return received by owners after business costs are paid. The correct answer is profit."},{"text":"Rent.","correct":false,"explanation":"Rent is income from allowing others to use property or land. The return to entrepreneurs or business owners after costs are paid is profit."},{"text":"Interest.","correct":false,"explanation":"Interest is income from savings or lending money. The income earned by entrepreneurs or business owners after costs are paid is profit."}]},{"id":"7a1e640e-b695-476f-8dec-a753daeeb6d8","cardType":"basic","points":1,"front":"Which income type is money received from savings or lending?","back":"Interest.","mcqOptions":[{"text":"Interest.","correct":true,"explanation":"Interest is the return received from saving money or lending it to someone else, usually expressed as a percentage of the amount saved or lent."},{"text":"Dividends.","correct":false,"explanation":"Dividends are payments to shareholders from company profits, not returns from savings or lending. The correct income type is interest."},{"text":"Rent.","correct":false,"explanation":"Rent is received for allowing others to use property or land. Money received from savings or lending is interest."},{"text":"Profit.","correct":false,"explanation":"Profit is the return to an entrepreneur after business revenue and costs are considered. The return from savings or lending is interest."}]},{"id":"0d50ad73-77a2-4cda-84e2-7d21a734ff6a","cardType":"basic","points":1,"front":"Which income type comes from owning property or land and letting others use it?","back":"Rent.","mcqOptions":[{"text":"Rent.","correct":true,"explanation":"Rent is income earned by allowing other people or organisations to use property or land in return for payment."},{"text":"Interest.","correct":false,"explanation":"Interest is earned from savings or lending money, not from allowing others to use property or land. The correct answer is rent."},{"text":"Dividends.","correct":false,"explanation":"Dividends are paid to shareholders who own company shares. Income from letting others use property or land is rent."},{"text":"Profit.","correct":false,"explanation":"Profit is the return to business owners after costs are paid. Income from property or land ownership is rent."}]},{"id":"b176930d-a4a0-47f7-98c7-573364839cfd","cardType":"basic","points":1,"front":"Which income type is paid to shareholders who own part of a company?","back":"Dividends.","mcqOptions":[{"text":"Dividends.","correct":true,"explanation":"Dividends are distributions of company profits paid to shareholders in proportion to their ownership of shares."},{"text":"Interest.","correct":false,"explanation":"Interest is earned from savings or lending money, not from owning shares in a company. Payments to shareholders are dividends."},{"text":"Rent.","correct":false,"explanation":"Rent is income from allowing others to use property or land. Shareholders may receive dividends from their company ownership."},{"text":"Profit.","correct":false,"explanation":"Profit is the business’s income after costs, whereas the portion paid to shareholders who own part of the company is dividends."}]},{"id":"5a682005-a5bd-482d-83fa-a4cfba92567f","cardType":"basic","points":1,"front":"What makes state benefits and pensions transfer payments?","back":"Money is paid with no good or service produced in return.","mcqOptions":[{"text":"Money is paid with no good or service produced in return.","correct":true,"explanation":"Transfer payments provide income without requiring the recipient to produce a good or service in return, as with many benefits and pensions."},{"text":"Money is paid with a good or service produced in return.","correct":false,"explanation":"Benefits and pensions are transfer payments precisely because recipients do not produce a good or service in return. Payment for such production would be wages or revenue."},{"text":"Money is paid with tax revenue collected in return.","correct":false,"explanation":"A transfer payment is not defined by whether money is paid in cash; its key feature is that no good or service is produced in return."},{"text":"Money is paid with a loan agreement produced in return.","correct":false,"explanation":"Transfer payments do not require recipients to repay the money through borrowing. Their defining feature is that no good or service is produced in return."}]},{"id":"a1e7149e-9c19-4c38-a2dd-92140a2f8d7f","cardType":"cloze","points":null,"front":"Gross income is income [ ]; net income is income [ ].","back":"Gross income is income before deductions; net income is income after deductions.","mcqOptions":[{"text":"Gross income is income before deductions; net income is income after deductions.","correct":true,"explanation":"Gross income is measured before tax, National Insurance and other deductions are removed. Net income is the amount remaining after these deductions, which is available to spend or save."},{"text":"Gross income is income after deductions; net income is income before deductions.","correct":false,"explanation":"This reverses the two definitions, a common confusion because net income is sometimes called take-home pay. Gross income is before deductions, while net income is what remains afterwards."},{"text":"Gross income is income before tax; net income is income after savings.","correct":false,"explanation":"Tax is only one possible deduction, so it does not fully define gross income. Savings are not deductions from income; net income is calculated after deductions such as tax and National Insurance."},{"text":"Gross income is income after spending; net income is income before spending.","correct":false,"explanation":"Spending happens after income has been received and does not determine whether it is gross or net. Gross income is before deductions, whereas net income is after deductions."}]},{"id":"f1e972ce-379b-4fa2-8a1b-6a6a3e5fab7d","cardType":"basic","points":1,"front":"Add gross household income: £24,000 + £8,000 + £3,600 + £1,200.","back":"£36,800.","mcqOptions":[{"text":"£36,800.","correct":true,"explanation":"Adding the four amounts gives £24,000 + £8,000 + £3,600 + £1,200 = £36,800. Gross household income is the total of all the listed gross incomes."},{"text":"£35,600.","correct":false,"explanation":"This omits the final £1,200, adding only £24,000, £8,000 and £3,600. Including every household income gives the correct total of £36,800."},{"text":"£37,600.","correct":false,"explanation":"This results from adding £2,000 instead of £1,200 for the final amount, overstating the total by £800. The four given figures sum to £36,800."},{"text":"£38,000.","correct":false,"explanation":"This is an overestimate caused by rounding or misadding the smaller amounts. The exact calculation, including £3,600 and £1,200, produces £36,800."}]},{"id":"3d827361-d17b-4856-92c1-559e2a276444","cardType":"basic","points":1,"front":"A household has gross income £36,800 and deductions £4,500. What is its net income?","back":"£32,300.","mcqOptions":[{"text":"£32,300.","correct":true,"explanation":"Net income equals gross income minus deductions: £36,800 - £4,500 = £32,300. Deductions reduce the amount available to the household."},{"text":"£41,300.","correct":false,"explanation":"This adds the deductions to gross income instead of subtracting them. Net income is found by taking £4,500 away from £36,800, giving £32,300."},{"text":"£32,800.","correct":false,"explanation":"This subtracts £4,000 rather than the stated £4,500, leaving the result £500 too high. Using the full deduction gives a net income of £32,300."},{"text":"£31,300.","correct":false,"explanation":"This subtracts £5,500, which is £1,000 more than the stated deductions. The correct calculation uses £4,500: £36,800 - £4,500 = £32,300."}]},{"id":"66d5b9a7-7e86-447a-b04e-0cdb8b4ce79a","cardType":"cloze","points":null,"front":"Wealth is the value of assets owned at a [ ], minus [ ].","back":"Wealth is the value of assets owned at a point in time, minus debts owed.","mcqOptions":[{"text":"Wealth is the value of assets owned at a point in time, minus debts owed.","correct":true,"explanation":"Wealth is a stock measured at a particular point in time. It is calculated by subtracting debts owed from the total value of assets owned."},{"text":"Wealth is the value of assets owned at a rate of change, minus income received.","correct":false,"explanation":"A rate of change and income received describe flows rather than the value of a household’s accumulated position. Wealth is measured at a point in time after subtracting debts owed."},{"text":"Wealth is the value of assets owned at a period of spending, minus taxes paid.","correct":false,"explanation":"Spending periods and taxes paid do not define wealth. The calculation concerns the value of assets at one point in time and deducts outstanding debts."},{"text":"Wealth is the value of assets owned at a level of income, minus saving made.","correct":false,"explanation":"Income and saving are flows measured over time, not the liabilities deducted from accumulated assets. Wealth is a point-in-time measure of assets minus debts owed."}]},{"id":"80ba45ff-0c87-4614-8e56-1b8de100a0e9","cardType":"cloze","points":null,"front":"Income is a [ ] over time; wealth is a [ ] at one point in time.","back":"Income is a flow over time; wealth is a stock at one point in time.","mcqOptions":[{"text":"Income is a flow over time; wealth is a stock at one point in time.","correct":true,"explanation":"Income is received over a period, so it is a flow. Wealth is the value accumulated and measured at a particular moment, so it is a stock."},{"text":"Income is a stock over time; wealth is a flow at one point in time.","correct":false,"explanation":"This swaps the definitions. Income is measured as a flow over a period, while wealth is a stock measured at one point in time."},{"text":"Income is a balance over time; wealth is a payment at one point in time.","correct":false,"explanation":"A balance describes an amount held, and a payment is a transaction, so these terms do not fit the definitions. Income is a flow and wealth is a stock."},{"text":"Income is a total over time; wealth is a cost at one point in time.","correct":false,"explanation":"A total and a cost do not distinguish flows from stocks. Income represents money received during a period, whereas wealth represents assets minus debts at a specific time."}]},{"id":"dc80b124-a6f2-4cf6-aacb-431f94be2607","cardType":"basic","points":1,"front":"A household has assets of £235,000 and debts of £164,000. What is its net wealth?","back":"£71,000.","mcqOptions":[{"text":"£71,000.","correct":true,"explanation":"Net wealth equals assets minus debts: £235,000 - £164,000 = £71,000. Debts reduce the value of the household’s accumulated wealth."},{"text":"£399,000.","correct":false,"explanation":"This adds assets and debts together, treating liabilities as if they increased wealth. Net wealth is calculated by subtracting £164,000 from £235,000, giving £71,000."},{"text":"£81,000.","correct":false,"explanation":"This subtracts £154,000 rather than the stated £164,000, making the result £10,000 too high. Using the actual debts gives net wealth of £71,000."},{"text":"£69,000.","correct":false,"explanation":"This subtracts £166,000, which is £2,000 more than the stated debts. The correct subtraction is £235,000 - £164,000 = £71,000."}]},{"id":"11242a01-06b1-4a57-ae00-d1e5dd4fc4af","cardType":"basic","points":2,"front":"Why can a high-income person still have low wealth if they spend most earnings?","back":"Little income is turned into assets.","mcqOptions":[{"text":"Little income is turned into assets.","correct":true,"explanation":"Wealth depends on accumulated assets, not simply current earnings. If most income is spent rather than used to buy or build assets, the person can have high income but low wealth."},{"text":"Most income is turned into assets.","correct":false,"explanation":"This describes saving or investing a large share of income, which would normally build wealth. Spending most earnings leaves little income available to be converted into assets."},{"text":"Little income is turned into debts.","correct":false,"explanation":"Debts are liabilities and reduce net wealth; they are not the assets that create accumulated wealth. The key point is that little income is saved or invested in assets."},{"text":"Little income is turned into taxes.","correct":false,"explanation":"Taxes are deductions from income, but the explanation for low wealth is the lack of accumulated assets. Spending most earnings leaves little to save or invest."}]},{"id":"4b3331e6-470c-4ed6-86f5-3471f6823849","cardType":"basic","points":2,"front":"Why can average income hide inequality?","back":"The same average can come from very different income shares.","mcqOptions":[{"text":"The same average can come from very different income shares.","correct":true,"explanation":"An average gives only the total income divided by the number of households or people. It does not show how income is distributed between them, so unequal shares can have the same average."},{"text":"The same average can come from very different price levels.","correct":false,"explanation":"Price levels affect purchasing power but do not explain why an income average can conceal unequal distribution. The relevant issue is how total income is divided into different income shares."},{"text":"The same average can come from very different tax rates.","correct":false,"explanation":"Tax rates may change disposable income, but they are not the reason an average hides inequality. Different distributions of income shares can produce the same calculated average."},{"text":"The same average can come from very different population sizes.","correct":false,"explanation":"Population size alone does not show how income is distributed, and an average already accounts for the number of people. Different income shares are what can conceal inequality."}]},{"id":"70f0c579-44b9-4a6a-97a6-286a0642c9c1","cardType":"basic","points":2,"front":"Why may workers with scarce, highly valued skills earn more?","back":"Firms offer higher wages to attract limited skilled workers.","mcqOptions":[{"text":"Firms offer higher wages to attract limited skilled workers.","correct":true,"explanation":"Scarce skills are in limited supply, so firms compete for these workers by offering higher wages. Their skills may also raise productivity, increasing the value employers gain from hiring them."},{"text":"Firms offer lower wages to attract limited skilled workers.","correct":false,"explanation":"Limited skilled workers are difficult to replace, so paying lower wages would make recruitment harder. The correct answer is that firms offer higher wages to attract workers with scarce, valuable skills."},{"text":"Firms offer higher wages to attract readily available unskilled workers.","correct":false,"explanation":"Readily available workers generally have less bargaining power because firms can recruit from a larger pool. Higher wages are mainly used to attract limited skilled workers whose abilities are in demand."},{"text":"Firms offer higher wages to retain abundant skilled workers.","correct":false,"explanation":"Abundant workers are not scarce, so firms face less pressure to raise wages to recruit them. The correct explanation is that higher wages attract limited skilled workers."}]},{"id":"b18beb48-0f8a-4052-a3ad-8d6a466a853d","cardType":"basic","points":2,"front":"How can discrimination or unequal opportunity affect income distribution?","back":"Barriers can limit access to higher-paid work.","mcqOptions":[{"text":"Barriers can limit access to higher-paid work.","correct":true,"explanation":"Discrimination or unequal opportunity can prevent some people from gaining qualifications, promotions or jobs, limiting their access to higher-paid employment and widening income differences."},{"text":"Barriers can improve access to higher-paid work.","correct":false,"explanation":"Discrimination and unequal opportunity restrict rather than improve access to well-paid jobs. The correct answer is that barriers can limit access to higher-paid work."},{"text":"Barriers can limit access to lower-paid work.","correct":false,"explanation":"Unequal opportunity most directly prevents affected groups from reaching better-paid positions, not lower-paid work. The correct answer is that barriers can limit access to higher-paid work."},{"text":"Equal opportunities can limit access to higher-paid work.","correct":false,"explanation":"Equal opportunities should reduce unfair barriers and improve access to jobs, including higher-paid work. The correct answer identifies barriers as the factor that limits access."}]},{"id":"52618a4a-95b0-441c-bb45-50150db54319","cardType":"basic","points":3,"front":"How can rising house prices widen wealth gaps between homeowners and renters?","back":"

Homeowners gain asset wealth as prices rise.
Renters may struggle to save a deposit.

","mcqOptions":[{"text":"

Homeowners gain asset wealth as prices rise.
Renters may struggle to save a deposit.

","correct":true,"explanation":"Rising house prices increase the value of assets owned by homeowners, while renters do not receive this gain and may find saving enough for a deposit increasingly difficult."},{"text":"

Homeowners lose asset wealth as prices rise.
Renters may struggle to save a deposit.

","correct":false,"explanation":"A rise in house prices normally increases the market value of homeowners’ property rather than reducing it. The correct answer says homeowners gain asset wealth while renters may struggle to save."},{"text":"

Homeowners gain asset wealth as prices rise.
Renters may easily save a deposit.

","correct":false,"explanation":"Higher house prices usually make the deposit needed to buy more difficult for renters to accumulate. The correct answer combines homeowners’ wealth gains with renters’ greater saving difficulty."},{"text":"

Homeowners gain asset wealth as prices fall.
Renters may struggle to save a deposit.

","correct":false,"explanation":"Homeowners gain asset wealth when property values rise, not when they fall. The correct answer links rising prices with homeowners’ gains and renters’ difficulty saving a deposit."}]},{"id":"4eae54b2-04c7-4670-b303-d1c0ef914322","cardType":"basic","points":2,"front":"Why did 2021-23 food and energy price rises hit low-income households hard?","back":"Essentials take a larger share of their income.","mcqOptions":[{"text":"Essentials take a larger share of their income.","correct":true,"explanation":"Low-income households spend a greater proportion of their budgets on necessities such as food and energy. Price rises therefore leave less income available for other goods and services."},{"text":"Essentials take a smaller share of their income.","correct":false,"explanation":"Necessities usually take a larger, not smaller, proportion of low-income households’ budgets. The correct answer explains why food and energy price rises had a particularly severe impact."},{"text":"Luxury goods take a larger share of their income.","correct":false,"explanation":"Low-income households generally spend most of their income on essentials rather than luxury goods. The correct answer is that essentials take a larger share of their income."},{"text":"Essentials take the same share of every household’s income.","correct":false,"explanation":"The budget share spent on essentials varies with income and is usually higher for poorer households. The correct answer is that essentials take a larger share of their income."}]},{"id":"67eb4196-71b0-45e6-8b64-d5174905c6fc","cardType":"basic","points":2,"front":"What benefit can some inequality create for the economy?","back":"It can strengthen incentives to work, train or take risks.","mcqOptions":[{"text":"It can strengthen incentives to work, train or take risks.","correct":true,"explanation":"If extra effort, training or entrepreneurial risk can lead to substantially higher rewards, some inequality may encourage people to work, improve their skills or start businesses."},{"text":"It can weaken incentives to work, train or take risks.","correct":false,"explanation":"The potential for higher rewards can encourage, rather than weaken, these activities. The correct answer is that some inequality can strengthen incentives to work, train or take risks."},{"text":"It can strengthen barriers to work, train or take risks.","correct":false,"explanation":"Inequality may create financial or social barriers, but the possible economic benefit described here is stronger incentives. The correct answer concerns motivation created by higher potential rewards."},{"text":"It can remove incentives to work, train or take risks.","correct":false,"explanation":"Income differences do not automatically remove motivation; the possibility of earning more may encourage productive choices. The correct answer is that inequality can strengthen incentives to work, train or take risks."}]},{"id":"37277ac0-39f2-4388-a02d-8d747556a045","cardType":"basic","points":2,"front":"How can large inequality affect firms selling everyday goods?","back":"Weak spending power can reduce demand.","mcqOptions":[{"text":"Weak spending power can reduce demand.","correct":true,"explanation":"When income is concentrated among a smaller group, many households have less disposable income to spend. Firms selling everyday goods may therefore face lower demand for their products."},{"text":"Weak spending power can increase demand.","correct":false,"explanation":"Lower spending power means households can afford fewer goods and services, so demand is likely to fall rather than rise. The correct answer is that weak spending power can reduce demand."},{"text":"Weak spending power can reduce supply.","correct":false,"explanation":"Supply refers to the amount firms are willing and able to sell, whereas household purchasing ability mainly affects demand. The correct answer is that weak spending power can reduce demand."},{"text":"Weak spending power can increase productivity.","correct":false,"explanation":"Productivity concerns output per unit of input and is not the direct effect of households having less spending power. The correct answer is that weak spending power can reduce demand."}]},{"id":"baba13e6-96bf-4ec2-92e2-98967b6c111b","cardType":"basic","points":3,"front":"How can large inequality pressure government finances?","back":"

Higher spending on benefits, healthcare and housing support.
Less tax revenue from low-income households.

","mcqOptions":[{"text":"

Higher spending on benefits, healthcare and housing support.
Less tax revenue from low-income households.

","correct":true,"explanation":"Greater inequality can increase the number of people needing public support, raising government spending. Low-income households also generally pay less direct tax, reducing revenue available to fund services."},{"text":"

Lower spending on benefits, healthcare and housing support.
Less tax revenue from low-income households.

","correct":false,"explanation":"High inequality can increase reliance on benefits and publicly funded services, so spending is likely to rise rather than fall. The correct answer combines higher support spending with less tax revenue."},{"text":"

Higher spending on benefits, healthcare and housing support.
More tax revenue from low-income households.

","correct":false,"explanation":"Poorer households generally have less taxable income, so they contribute less direct tax revenue. The correct answer is higher support spending alongside less tax revenue from low-income households."},{"text":"

Higher spending on education, defence and pensions.
Less tax revenue from low-income households.

","correct":false,"explanation":"Inequality specifically creates pressure through benefits, healthcare and housing support, rather than necessarily these other spending categories. The correct answer identifies the main support costs and lower tax revenue."}]},{"id":"3dffa0c9-bc29-420a-b7f1-e91ffa83ddb4","cardType":"cloze","points":null,"front":"High income can help people build [ ]; wealth can create more [ ] through rent, interest, dividends and profits.","back":"High income can help people build wealth; wealth can create more income through rent, interest, dividends and profits.","mcqOptions":[{"text":"High income can help people build wealth; wealth can create more income through rent, interest, dividends and profits.","correct":true,"explanation":"Higher income allows people to save and accumulate assets, creating wealth. Those assets can then generate further income through rent, interest, dividends and profits, reinforcing inequality."},{"text":"High income can help people build debt; wealth can create more income through rent, interest, dividends and profits.","correct":false,"explanation":"Saving from high income builds assets and wealth, whereas debt represents money owed. The correct answer is that high income can help people build wealth, which may then generate more income."},{"text":"High income can help people build wealth; wealth can create more debt through rent, interest, dividends and profits.","correct":false,"explanation":"Rent, interest, dividends and profits are returns that generate income, not debt. The correct answer links wealth with additional income from owning productive or valuable assets."},{"text":"High income can help people build income; wealth can create more income through rent, interest, dividends and profits.","correct":false,"explanation":"Income is earned or received, while building assets from saved income creates wealth. The correct answer uses wealth for the first blank and income for the returns generated by wealth."}]},{"id":"501f23f1-5f0f-4dee-9735-19b37b996439","cardType":"basic","points":2,"front":"Why are gaps caused by inherited wealth or discrimination harder to justify?","back":"They reduce equality of opportunity.","mcqOptions":[{"text":"They reduce equality of opportunity.","correct":true,"explanation":"Inherited wealth and discrimination affect outcomes independently of effort or ability, so people do not begin with the same chances to succeed. This undermines equality of opportunity."},{"text":"They increase incentives to work.","correct":false,"explanation":"Greater incentives can sometimes justify income differences based on effort or productivity, but inherited wealth and discrimination do not reliably reward either. The gaps are harder to justify because they reduce equality of opportunity."},{"text":"They increase equality of opportunity.","correct":false,"explanation":"This reverses the relationship: inherited advantages and discrimination give some people better chances than others. Such gaps reduce equality of opportunity rather than increasing it."},{"text":"They reward higher productivity.","correct":false,"explanation":"Income differences linked to productivity may be defended as rewards for economic contribution. Inherited wealth and discrimination are harder to justify because they reduce equality of opportunity instead."}]}]}],"examCountdown":{"examDate":"2027-05-13","paperLabel":"Paper 1"},"heading":"3.3 Fair distribution of income","title":"Fair distribution of income Flashcards","topbar":{"backHref":"/gcse/economics/ocr/flashcards"},"topicSidebar":"$L90"}]}],"topicId":"edffaa95-f4b8-5924-8ce3-f53c42be3b2c","walled":"$L91"}],"$L92","$L93"]

3.3 Fair distribution of income Flashcards

3.3 Fair distribution of income Flashcards