Question

poverty and Inequality in income distribution are the hindrance in the process of economic development. explain
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Answer 1

Answer:

Income inequality among households is measured by the distribution of incomes according to size (or level) of income per household. The distribution across income-size classes is called ‘the size distribution of income’. The higher the income share of high-income classes and the lower the share of low-income classes, the more unequal income distribution is supposed to be.

If inequality in income distribution, as measured by such indicators as the Gini-coefficient, remains the same, increases in PCI are sure to reduce the incidence of poverty. However, if inequality is bound to rise along the rising of the inverted- U shaped-curve, low-income economies may have to experience an increased incidence of poverty-when they begin to experience economic growth as measured by increase in real PCI. As in the case of in­equality, this relationship between poverty and economic growth in the early stage of development can be confirmed by cross-section data and not time-series data.Causes of Inequality

Changes in Factor Shares

Dual Economic StrucTURE

Income Difference between Agricultural and Non-Agricultural Sectors