1. The Distribution of Wealth and Income

2. Poverty A relative term that compares what personal wealth people have in a given area

3. Poverty A relative term that compares what personal wealth people have in a given area Poverty in the US is not the same as poverty in other countries

4. Poverty A relative term that compares what personal wealth people have in a given area Poverty in the US is not the same as poverty in other countries In other countries, that may mean starvation, In the US: below $14,000 per year for a family of 4

5. Poverty A relative term that compares what personal wealth people have in a given area Poverty in the US is not the same as poverty in other countries In other countries, that may mean starvation, In the US: below $14,000 per year for a family of 4 This # is calculated with expenses for: food, rent, heat, and even cable TV

6. Wealth vs. Income Wealth – the accumulation of value

7. Wealth vs. Income Wealth – the accumulation of value Income – is the flow of value

8. Wealth vs. Income Wealth – the accumulation of value Income – is the flow of value It is possible to have wealth (nice house) but have low income

9. Wealth vs. Income Wealth – the accumulation of value Income – is the flow of value It is possible to have wealth (nice house) but have low income It is possible to have high income, but no wealth (spent it all)

10. Income Distribution Who has the money???

11. Income Distribution Who has the money??? This can be measured by the Lorenz Curve which shows the distribution of wealth in the economy

12. Lorenz Curve Line of Perfect Equality Lorenz Curve Distribution of Income Family Groups % %0100

13. Income Distribution Who has the money??? This can be measured by the Lorenz Curve which shows the distribution of wealth in the economy The closer the Lorenz curve is to the line of equality, the more equal the distribution of income

14. Lorenz Curve (Near Equal) Line of Perfect Equality Lorenz Curve Distribution of Income Family Groups % %0100

15. Income Distribution Who has the money??? This can be measured by the Lorenz Curve which shows the distribution of wealth in the economy The closer the Lorenz curve is to the line of equality, the more equal the distribution of income The further from the line, the more unequal the distribution

16. Lorenz Curve (Unequal) Line of Perfect Equality Lorenz Curve Distribution of Income Family Groups % %0100