Addressing income and wealth inequality
3.3What the syllabus asks of you
- difference between income as a flow concept and wealth as a stock concept
- measuring income and wealth inequality: Gini coefficient (calculation not required)
- economic reasons for inequality of income and wealth
- policies to redistribute income and wealth: minimum wage
- policies to redistribute income and wealth: transfer payments
- policies to redistribute income and wealth: progressive income taxes, inheritance and capital taxes
- policies to redistribute income and wealth: state provision of essential goods and services
Drill this topic
Every question on Addressing income and wealth inequality, untimed, marked as you go.
Make a worksheet
Choose the years and how many questions, then print it with the answers on separate pages.
67 questions
1May / June 2026 · Paper 11 · Q12Show mark scheme →
Athe dividend on shares owned by the person
Bthe interest on the person's savings account
Cthe value of the house owned by the person
Dthe wages paid for the person's work
Mark scheme
2May / June 2026 · Paper 12 · Q12Show mark scheme →
Aadvertising expenses incurred by a charity organisation
Bfood vouchers to help low-income households pay for food
Cinterest-free study loans given to deserving students by the government
Dsalary paid to a nurse working in a hospital that provides free treatment
Mark scheme
3May / June 2026 · Paper 12 · Q14Show mark scheme →
Aless progressive income tax; lower threshold inheritance tax; increase minimum wage
Bless progressive income tax; raise threshold inheritance tax; decrease minimum wage
Cmore progressive income tax; lower threshold inheritance tax; increase minimum wage
Dmore progressive income tax; raise threshold inheritance tax; decrease minimum wage
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4May / June 2026 · Paper 13 · Q11Show mark scheme →
Ainterest received on savings held in bank accounts
Bjewellery purchased by households
Cprofits gained from investments
Drent gained from ownership of property
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5May / June 2026 · Paper 13 · Q13Show mark scheme →
Aincomes are distributed more equally
Bthe taxation system has become more progressive
Clow-income workers have acquired new skills
Dthere is a reduction in welfare payments
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6May / June 2026 · Paper 14 · Q12Show mark scheme →
Athe Gini coefficient
Bthe rate of income tax
Cthe rate of inflation
Dthe circular flow of income
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7Oct / Nov 2025 · Paper 11 · Q13Show mark scheme →
Aannual income
Bbenefits and pensions
Cinterest earned on savings
Dsavings held in bank accounts
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8Oct / Nov 2025 · Paper 12 · Q14Show mark scheme →
Aan increase in food and energy subsidies
Ban increase in structural unemployment
Can increase in the national minimum wage
Dan increase in the top rate of income tax
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9Oct / Nov 2025 · Paper 12 · Q24Show mark scheme →
Ato discourage the consumption of a particular good
Bto distribute disposable income more evenly
Cto increase the disposable income of households
Dto reduce demand for healthcare services
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10Oct / Nov 2025 · Paper 13 · Q14Show mark scheme →
Aspending on new road building
Bspending on pensions to the elderly
Cspending on buying new police cars
Dspending on wages of teachers
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11Oct / Nov 2025 · Paper 14 · Q14Show mark scheme →
AHigher paid workers maintain pay differentials.
BLabour mobility is low.
CThe informal economy is small.
DThe minimum wage leads to increased unemployment.
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12Oct / Nov 2025 · Paper 33 · Q30Show mark scheme →
Aan increase in indirect taxes
Ban increase in long-term unemployment
Can increase in the national minimum wage
Dan increase in population
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13Oct / Nov 2025 · Paper 34 · Q11Show mark scheme →
AIt boosts the morale of workers and enhances labour productivity.
BIt raises incomes of poorer workers.
CIt reduces government spending on welfare payments.
DIt reduces structural unemployment.
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14Oct / Nov 2025 · Paper 34 · Q27Show mark scheme →
Aincreased discrimination
Bincreased labour market participation
Cincreased skill level of workers
Dincreased welfare payments
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15May / June 2025 · Paper 11 · Q11Show mark scheme →
Ainterest received
Bprofits
Cproperty
Dincomes
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16May / June 2025 · Paper 11 · Q15Show mark scheme →
Aa household moving savings from one bank account to another
Ba monthly repayment on a loan used to buy a new cooker
Cthe amount paid to transport goods from one city to another
Dgrants paid to students by the government
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17May / June 2025 · Paper 12 · Q12Show mark scheme →
Athe house owned by the individual
Bthe savings in the individual's bank account
Cthe stocks and shares owned by the individual
Dthe wages earned by the individual
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18May / June 2025 · Paper 32 · Q25Show mark scheme →
Ato increase indirect taxes
Bto increase trade union power
Cto increase the rate of interest
Dto reduce welfare payments
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19May / June 2025 · Paper 34 · Q9Show mark scheme →
Aa faster rate of economic growth
Ba higher Human Development Index
Ca lower Gini coefficient
Da lower tax/GDP ratio
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20Feb / March 2025 · Paper 12 · Q14Show mark scheme →
AA skilled artist may keep a painting in stock whose value increases after their death.
BIndividuals can choose to spend all available income, leaving wealth unchanged.
CNot every form of individual wealth can be traded for money in a market.
DWealth is a stock which cannot be broken down into an individual's different assets.
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21Feb / March 2025 · Paper 12 · Q15Show mark scheme →
AAll three countries have seen an overall improvement in income equality.
BCosta Rica has the highest level of consumer income of all three countries.
CNew Zealand's income inequality worsened between 2018 and 2020.
DSweden's economy has the highest income equality of all three countries.
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22Feb / March 2025 · Paper 32 · Q9Show mark scheme →
Awhen a country's income tax system is made more progressive
Bwhen someone is made better off without making someone else worse off
Cwhen the best use is made of scarce resources
Dwhen there is an increase in the Gini coefficient
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23Oct / Nov 2024 · Paper 12 · Q13Show mark scheme →
Aan increase in indirect taxation
Ban increase in the value of property
Ca reduction in the minimum wage
Da reduction in the rate of interest paid on savings
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24Oct / Nov 2024 · Paper 32 · Q15Show mark scheme →
AIncrease the general sales tax / VAT rate on luxury goods.
BIntroduce a minimum wage.
CInvest heavily in schools and education programmes.
DStimulate economic growth through skills and productivity training.
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25Oct / Nov 2024 · Paper 32 · Q24Show mark scheme →
Aa faster rate of economic growth
Ba higher Human Development Index
Ca lower Gini coefficient
Da lower tax / GDP ratio
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26Oct / Nov 2024 · Paper 32 · Q29Show mark scheme →
ACapital gains tax has been reduced.
BIncome tax has been made more progressive.
CInheritance tax has been reduced.
DThe tax-free allowance has been decreased for everyone.
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27May / June 2024 · Paper 31 · Q30Show mark scheme →
AIncome is distributed more equally in Denmark than France.
BIncome is distributed more equally in Namibia than Zambia.
CIncome per capita is higher in Zambia than Namibia.
DThere are proportionally more people below the poverty line in Zambia than France.
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28May / June 2024 · Paper 32 · Q18Show mark scheme →
AThey allow firms to dismiss workers as unemployment benefits provide support to unemployed workers.
BThey force firms to raise wages to encourage workers to work rather than relying on unemployment benefits.
CThey provide a safety net to workers which might reduce their efforts to find a suitable job.
DThey increase government spending and force it to raise taxes.
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29May / June 2024 · Paper 33 · Q30Show mark scheme →
AIncome is distributed more equally in Denmark than France.
BIncome is distributed more equally in Namibia than Zambia.
CIncome per capita is higher in Zambia than Namibia.
DThere are proportionally more people below the poverty line in Zambia than France.
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30Feb / March 2024 · Paper 12 · Q12Show mark scheme →
AThe effective minimum wage is increased by 25%.
BThe rate of income tax paid by the lowest band of earners is reduced.
CThe government increases the level of subsidies given to producers of some merit goods.
DThe government provides more goods that are regarded as essential.
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31Feb / March 2024 · Paper 12 · Q14Show mark scheme →
Aa higher tax-free allowance; a higher rate of tax
Ba higher top rate of tax; a lower rate of tax
Ca lower tax-free allowance; a higher number of exempt goods
Da lower top rate of tax; a lower number of exempt goods
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32Oct / Nov 2023 · Paper 12 · Q15Show mark scheme →
AIt must include a cash payment.
BIt must involve a banking transaction.
CIt must originate from government activity.
DIt must relate to a non-productive activity.
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33Oct / Nov 2023 · Paper 12 · Q27Show mark scheme →
Aprogressive income tax
Bproportionate income tax
Cproportionate indirect tax
Dspecific indirect tax
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34Oct / Nov 2023 · Paper 13 · Q15Show mark scheme →
Adecrease in the standard of living
Bdisincentive to accept paid work
Cincrease in inequality
Dincrease in poverty
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35Oct / Nov 2023 · Paper 13 · Q16Show mark scheme →
Adecrease / increase / reduce
Bdecrease / reduce / reduce
Cincrease / increase / increase
Dincrease / reduce / increase
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36Oct / Nov 2023 · Paper 31 · Q15Show mark scheme →
Afood subsidies for the poor | targets those in need | high administrative costs
Bhigher national minimum wage | encourages skill training | higher budget deficit
Cprovision of free child care | increases employability | disincentive to work
Duniversal monetary benefits | saves on bureaucracy | reduced labour mobility
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37Oct / Nov 2023 · Paper 31 · Q25Show mark scheme →
Astrength: benefits are only given to those in need; weakness: poor non-workers will be no better off
Bstrength: intergenerational equity is improved; weakness: tax avoidance is more likely
Cstrength: workers will be encouraged to work more hours; weakness: taxation has become more regressive
Dstrength: the policy approach will be efficient to operate; weakness: wealth distribution will be affected more than income distribution
Mark scheme
38Oct / Nov 2023 · Paper 31 · Q29Show mark scheme →
A\frac{F + G}{H}
B\frac{F + G}{F + G + H}
C\frac{G}{G + H}
D\frac{H}{F + G + H}
Mark scheme
39Oct / Nov 2023 · Paper 32 · Q13Show mark scheme →
Atop rates of income tax: increase; indirect taxes: increase; value of state benefits: increase
Btop rates of income tax: increase; indirect taxes: reduce; value of state benefits: increase
Ctop rates of income tax: reduce; indirect taxes: increase; value of state benefits: reduce
Dtop rates of income tax: reduce; indirect taxes: reduce; value of state benefits: reduce
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40Oct / Nov 2023 · Paper 32 · Q27Show mark scheme →
AIt has moved closer to one.
BIt has moved closer to zero.
CIt has moved from negative to positive.
DIt has moved from positive to negative.
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41May / June 2023 · Paper 11 · Q16Show mark scheme →
A$41 000
B$43 000
C$44 000
D$45 000
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42May / June 2023 · Paper 13 · Q16Show mark scheme →
Ayes / no / no
Byes / yes / no
Cyes / no / yes
Dno / yes / no
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43May / June 2023 · Paper 32 · Q15Show mark scheme →
Aa reduction in the top rate of taxation
Ban increase in government spending on education and training
Can increase in unemployment
Dprivatisation of the education sector
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44May / June 2023 · Paper 33 · Q16Show mark scheme →
AIndia is more likely to have lower indirect taxes and a public sector education system than Norway.
BIndia is more likely to have a progressive income tax system and means tested benefits than Norway.
CNorway is more likely to have a progressive tax system and public sector pensions than India.
DNorway is likely to have a higher percentage of tax generated from indirect taxes and privately funded pensions than India.
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45May / June 2023 · Paper 33 · Q30Show mark scheme →
AX divided by (X plus Y)
B(X plus Y) divided by X
C(X plus Y) divided by Y
DY divided by (X plus Y)
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46Feb / March 2023 · Paper 12 · Q14Show mark scheme →
AGini coefficients are not comparable between income and wealth because one is a flow concept and the other is a stock concept.
BIncome inequality is greater in country P than in country Q.
CWealth inequality is greater in country P than in country Q.
DWealth inequality is greater than income inequality in both countries.
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47Feb / March 2023 · Paper 32 · Q14Show mark scheme →
A
B
C
D
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48Oct / Nov 2022 · Paper 11 · Q15Show mark scheme →
AThe minimum wage helped the low paid more than the extremely low paid.
BThe minimum wage reduced the numbers of both low paid and extremely low paid.
CThe minimum wage reversed the trend in low pay of the previous 20 years.
DThe minimum wage was responsible for the largest reduction of low pay in the period.
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49Oct / Nov 2022 · Paper 11 · Q18Show mark scheme →
AThere need to be more incentives for unemployed workers to seek jobs.
BState pensions need to be increased.
CThe level of income tax needs to be raised.
DThe level of government expenditure needs to be increased.
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50Oct / Nov 2022 · Paper 12 · Q17Show mark scheme →
Athe advertising expenditure of a firm
Bthe allowance given by a parent to their child while at school
Cthe rent paid to a land owner by a tenant farmer
Dthe wage paid to a worker in the government service
Mark scheme
51Oct / Nov 2022 · Paper 32 · Q14Show mark scheme →
AAll income groups are better off except those originally earning more than $40 000 per year.
BBenefits paid to the lower income groups are not a burden because they are not paid out of tax revenues.
CThe average final income of the top 20% exceeds the combined final incomes of the other groups.
DThe progressive taxation system still favours the top 20% over the bottom 20% of households.
Mark scheme
52Oct / Nov 2022 · Paper 32 · Q15Show mark scheme →
Athe imposition of minimum wage levels below the levels produced by the market
Bthe introduction of progressive personal income taxes
Cthe payment of benefits to low income households
Dthe removal of sales taxes on food consumed by lower income households
Mark scheme
53Oct / Nov 2022 · Paper 33 · Q15Show mark scheme →
AThe effects of direct taxation have affected the rich less than the poor.
BThe government’s policy achieved income equality across households.
CThe government redistributed all income taken from the rich to the poor.
DThe government’s policy reduced the income inequality between the poor and the rich.
Mark scheme
54May / June 2022 · Paper 11 · Q18Show mark scheme →
Agovernment spending on hospitals
Bgovernment spending on motorways
Cminimum wage
Dwelfare benefits
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55May / June 2022 · Paper 12 · Q17Show mark scheme →
Abank deposits
Bcash
Cgovernment
Dproduction
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56May / June 2022 · Paper 14 · Q14Show mark scheme →
AThe payment comes from taxes paid by employed workers.
BThe payment comes from government savings, not current income.
CThe payment is made without the production of goods and services taking place.
DThe payment must be spent as directed by the government.
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57May / June 2022 · Paper 32 · Q15Show mark scheme →
Aincrease direct taxes
Bincrease indirect taxes
Cincrease subsidies
Dincrease transfer payments
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58Oct / Nov 2021 · Paper 13 · Q16Show mark scheme →
Ahouseholds' payments of indirect taxes
Bgovernment pension payments
Cpayments between firms for the supply of raw materials
Dpayment of salaries
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59Oct / Nov 2021 · Paper 31 · Q13Show mark scheme →
Adecrease direct tax, decrease indirect tax, decrease availability of benefit
Bdecrease direct tax, increase indirect tax, increase availability of benefit
Cincrease direct tax, decrease indirect tax, increase availability of benefit
Dincrease direct tax, increase indirect tax, decrease availability of benefit
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60Oct / Nov 2021 · Paper 31 · Q15Show mark scheme →
A1/3
B1/4
C3/4
D4/3
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61Oct / Nov 2021 · Paper 32 · Q13Show mark scheme →
AIt expects total tax revenue to be unaffected by the policy change.
BIt is concerned about the possibility of emigration by some high earning individuals.
CIt regards equity considerations as being more important than efficiency ones.
DIt wishes to switch the emphasis of its tax system from direct to indirect taxation.
Mark scheme
62Oct / Nov 2021 · Paper 32 · Q20Show mark scheme →
Aadditional government regulation of product and factor markets
Bincreased progressive direct taxation and decreased indirect taxation
Cincreased trade union power and reduced labour market flexibility
Dreduced welfare benefits and increased rate of interest
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63May / June 2021 · Paper 11 · Q15Show mark scheme →
Aa reallocation of spending from defence to education
Badditional funding for government pensions
Cextra spending on public sector infrastructure
Dincreased salaries paid to the police
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64May / June 2021 · Paper 31 · Q15Show mark scheme →
AThe Gini coefficient falls and the income tax system becomes more progressive.
BThe Gini coefficient falls and the income tax system becomes more regressive.
CThe Gini coefficient rises and the income tax system becomes more progressive.
DThe Gini coefficient rises and the income tax system becomes more regressive.
Mark scheme
65May / June 2021 · Paper 32 · Q15Show mark scheme →
Aa decrease in ad valorem sales tax rates
Ba more regressive income tax system
Ca more progressive income tax system
Dan increase in transfer payments to the unemployed
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66May / June 2021 · Paper 33 · Q15Show mark scheme →
AThe Gini coefficient falls and the income tax system becomes more progressive.
BThe Gini coefficient falls and the income tax system becomes more regressive.
CThe Gini coefficient rises and the income tax system becomes more progressive.
DThe Gini coefficient rises and the income tax system becomes more regressive.
Mark scheme
67Feb / March 2021 · Paper 12 · Q15Show mark scheme →
Athe payment made by a company to its shareholders out of its profits
Bthe payment made for a legal document to transfer ownership of a house
Cthe payment made to a retired person in the form of a pension
Dthe payment made to a professional sports team for the transfer of a player
Mark scheme