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 NOT a component of Aggregate Demand?

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Which of the following sectors contributes the most to India’s GDP?

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What is meant by “monetary policy”?

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What is the significance of “Purchasing Power Parity” (PPP)?

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Which of the following is NOT an example of an indirect tax?

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What is the term for the ability of an economy to produce more output from the same inputs?

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What is “quantitative easing”?

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What does the Gini Coefficient measure?

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What is “fiscal stimulus”?

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Which of the following factors is NOT included in the calculation of Human Development Index (HDI)?

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