What is income inequality?

"Questions of fairness often accompany discussions of income inequality, poverty, and discrimination. Answering them ultimately involves value judgments; they are normative questions, not positive ones. You must decide for yourself if a particular distribution of income is fair or if society has made adequate progress toward reducing poverty or discrimination.

"The material in this chapter will not answer those questions for you; rather, in order for you to have a more informed basis for making your own value judgments, it will shed light on what economists have learned about these issues through study and testing of hypotheses."
- Principles of Macroeconomics

Activity

Principles of Macroeconomics: "Chapter 19: Inequality, Poverty, and Discrimination"

• Read this chapter for a more detailed look at the topic of income inequality. Attempt the "Try It” problems at the end of each section before checking your answers.