POL-5.B—Explain sources of income and wealth inequality

Explain sources of income and wealth inequality.

• Each factor of production receives the value of its marginal product, which can contribute to income inequality.
• Sources of income and wealth inequality include differences in tax structures (progressive and regressive tax structures), human capital, social capital, inheritance, effects of discrimination, access to financial markets, mobility, and bargaining power within economic and social units (firms, labor unions, and families).
• Enduring understanding POL-5: Market outcomes can result in income inequality.