Question

1. The income distribution is a more accurate measure of economic inequality than the wealth distribution because income excludes human capital.

Answer:

Reason:

Answer 1

Income distribution is a better measure of inequality than wealth distribution, but it is not because income distribution excludes the role of human capital, but because it includes human capital.

This is because income earned indicates the possession of education or skills that will enable earning money and indicate the future ability as well to do so. On the other hand, wealth distribution merely shows the current stock of inherited or acquired assets that a person possesses, giving not much indication of the skills he possesses that will enable him to keep and acquire more wealth.