Topic Details (Notes format)

Income Inequality and Its Implications

Subject: Economics

Book: Comprehensive Indian Economy

Rising inequality can undermine social cohesion, limit mass consumer demand, and perpetuate poverty cycles. Factors include uneven distribution of assets, skill disparities, and growth concentrated in high-end services. Tools like the Gini coefficient measure inequality. Strategies to address it involve progressive taxation, social sector spending, and rural employment programs. Students should note how inequality interacts with caste, gender, and regional divides. Examiners often test knowledge on welfare economics, policy instruments (subsidies, direct transfers), and the trade-offs between rapid growth vs. equitable distribution. A balanced approach fosters stable socio-economic development.

Practice Questions

Which of the following is an example of a public sector undertaking (PSU) in India?

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Which of the following is a feature of a command economy?

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What is the main function of the Reserve Bank of India (RBI)?

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What does the Gini Coefficient measure?

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Which of the following is an example of a capital receipt for the government?

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What does the “Human Development Index” measure?

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What is meant by the term “current account deficit”?

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What is meant by “structural unemployment”?

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What is the primary role of the Securities and Exchange Board of India (SEBI)?

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What is meant by “stagflation”?

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