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I'll be as brief as I can Laura! Firstly, I need to know what you mean by poor housing. Does it mean: 1. Poor quality housing 2. Housing with residents that come from low income? Since it's an economics question, I'm going to assume the second 😊 Low income earners have a higher marginal propensity to consume (MPS). By the way, use that phrasing in your exam, they love it! What it means is simple. Poorer people spend a higher proportion of their money. As a result, they don't have much left after they pay for rent and bills. Wealthier families, however, have a lot of disposable income left. In the long run, disposable income for rich families = travel, private schools and as a result, the best opportunities. Hope that gives you some guidance!
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