More people are becoming billionaires at the same time that other people are living in poverty. While some people enjoy luxuries others lack even basic essentials. To enable more people to achieve a minimum living standard some economists support the redistribution of income.

Mark scheme

Marking points from the official mark scheme (May/June 2017). The mark or mark type is shown in brackets.

1. [1] (a) Taking income from one group e.g. from the rich
2. [1] (a) and giving it to another e.g. to the poor
3. [1] (a) Creating greater equality/reducing inequality/reducing gap between rich and poor
4. [1] (a) May be achieved by using progressive taxation/state benefits
5. [1] (b) greater income
6. [1] (b) means the rich have more purchasing power
7. [1] (b) greater wealth/savings
8. [1] (b) which generates income to spend/ e.g. interest, dividends, capital gains
9. [1] (b) greater ability to borrow
10. [1] (b) because banks are more willing to lend to the rich/the rich have more collateral
11. [1] (b) more confidence
12. [1] (b) because the rich may expect that their purchasing power will continue to be high
13. [1] (c) Absolute poverty is lack of access to basic necessities
14. [1] (c) example e.g. food/living below a certain income level e.g. $1.25
15. [1] (c) The economic problem is unlimited wants
16. [1] (c) exceeding finite resources/scarce resources/scarcity
17. [1] (c) Even if everyone had access to basic necessities, people would still want more products
18. [1] (c) e.g. better quality food
19. [1] (c) there would not be enough resources to meet people's increasing wants
20. [1] (c) relative poverty will still exist/rich will still be able to spend more than the poor
21. [1] (c) Over time what is considered to be absolute poverty is likely to change
22. [1] (d) Income / output is an important influence on living standards
23. [1] (d) income influences the quantity and quality of goods and services people can consume
24. [1] (d) the healthcare and education they can enjoy
25. [1] (d) Higher GDP per head can increase tax revenue
26. [1] (d) which can be spent on items e.g. education which can increase living standards
27. [1] (d) GDP per head takes into account the size of the population / it is an average
28. [1] (d) it is GDP divided by population
29. [1] (d) a rise in GDP matched by a rise in population would not mean that people are better off
30. [1] (d) GDP per head is measured by all countries and so comparisons can be made
31. [1] (d) relatively easy to calculate / understand
32. [1] (d) There are wider/more accurate measures of living standards
33. [1] (d) e.g. HDI
34. [1] (d) which takes into account education/literacy
35. [1] (d) and health/life expectancy
36. [1] (d) GDP per head is an average
37. [1] (d) it does not take into account distribution of income
38. [1] (d) GDP per head may be high but some people may be poor
39. [1] (d) GDP per head does not take into account leisure time
40. [1] (d) GDP per head may be high but if people are working long hours the quality of their lives may be low
41. [1] (d) Increases in output may increase pollution
42. [1] (d) e.g. lower air quality may reduce living standards
43. [1] (d) GDP per head may not fully reflect the quality of products produced
44. [1] (d) which may increase even if GDP per head does not change
45. [1] (d) GDP per head may not fully reflect the quantity of goods produced
46. [1] (d) due to the existence of the informal economy
47. [1] (d) GDP per head does not include safe drinking water
48. [1] (d) which has a significant influence on health