Income Distribution Definition Economics

In economics income distribution covers how a country s total gdp is distributed amongst its population.

Income distribution definition economics. Income and its distribution have always been a central concern of economic theory and economic policy. Income distribution looks at how much different socioeconomic groups in a country earn. What does income distribution mean. In general theory and the national income and product accounts each unit of output corresponds to a unit of income one use of national accounts is for classifying factor incomes and measuring their respective shares as.

On one extreme are those who argue that all incomes should be the same or as nearly so as possible and that a principal function of government should be to redistribute income from the haves to the have nots. Of a while more equal than most nations of the world is far from perfectly equal. The income distribution in the good old u. Income distribution is the smoothness or equality with which income is dealt out among members of a society.

Classical economists such as adam smith 1723 1790 thomas malthus 1766 1834 and david ricardo 1772 1823 concentrated their attention on factor income distribution that is the. The distribution of income is central to one of the most enduring issues in political economics. Income distribution proves to be the way that a country s entire gross domestic product is actually shared out among all members of the population. If no one earns any money except for one person who earns all of the money then the.

Income distribution is explained in detail and with examples in the economics edition of the herold financial dictionary which you can get from amazon in ebook or paperback edition. Economic theory and economic policy have long seen income and its distribution as a central concern. In economics income distribution is how a nation s total gdp is distributed amongst its population. In other words income distribution refers to the equality or smoothness with which people s incomes are distributed.

Income is money what an individual or business receives in exchange for providing labor producing a good or service or through investing capital. Income distribution tells us much more about a country s economy and its wage patterns than average income does. Meaning of income distribution. If everyone earns exactly the same amount of money then the income distribution is perfectly equal.