What is the difference between income and wealth? How can wealth contribute to income inequality?

Income is a flow; it represents a stream of wage and salary earnings, along with rent, interest, and profits, as depicted in Chapter 2's circular flow diagram. In contrast, wealth is a stock, reflecting at a particular moment the financial and real assets an individual has accumulated over time. Wealth is more unequal than income. This inequality of wealth leads to inequality in rent, interest, and dividends, which in turn contributes to income inequality. Those who own more machinery, real estate, farmland, stocks, and bonds and who have more money in savings accounts obviously receive greater income than people with less or no wealth.