A Level Economics AQA Practice Exam

What is meant by economic inequality?

1. The equal distribution of income among households

2. Differences in income and wealth across households

3. The allocation of resources by the government

4. Uniform access to all government services

The correct answer is: Differences in income and wealth across households

Economic inequality refers to the differences in income and wealth across households, making it the correct choice. This concept captures the disparities in financial resources that individuals and families possess, highlighting the fact that some people earn significantly more than others or have more assets at their disposal. It also encompasses various dimensions of inequality, such as income from wages, investments, and property ownership, as well as the unequal opportunities that might arise from these differences. The other options focus on concepts that do not accurately define economic inequality. The equal distribution of income suggests a scenario that is contrary to the idea of inequality, while the allocation of resources by the government pertains to policy decisions rather than the distribution of personal income and wealth. Finally, uniform access to all government services implies equality in access rather than addressing the differences in economic status among households. Thus, the clarity and specificity of economic inequality align with the differences in income and wealth across households.