MyEconLab Concept Video
To measure economic inequality, we look at the distributions of income and wealth. A household’s income is the amount that it receives in a given period. A household’s market income equals the wages, interest, rent, and profit that the household earns in factor markets before paying income taxes. The Census Bureau defines another income concept, money income, which equals market income plus cash payments to households by the government. We will use the money income concept to describe the distribution of income in the United States.