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

What is the objective of the Goods and Services Tax (GST)?

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Which term refers to the decrease in the value of a currency relative to foreign currencies?

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What does “balance of trade” refer to?

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What is “open market operations” (OMO)?

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What is meant by “credit rating”?

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

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

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What is the main feature of a free-market economy?

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Which of the following measures can reduce a trade deficit?

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Which of the following is NOT a function of the World Trade Organization (WTO)?

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