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Explain the basic problem of distribution of income.

Answer» <html><body><p></p>Solution :This problem is concerned with the distribution of income in an economy. It is concerned with either to <a href="https://interviewquestions.tuteehub.com/tag/produce-1167752" style="font-weight:bold;" target="_blank" title="Click to know more about PRODUCE">PRODUCE</a> goods for high-income groups or low- income groups. The <a href="https://interviewquestions.tuteehub.com/tag/capacity-908575" style="font-weight:bold;" target="_blank" title="Click to know more about CAPACITY">CAPACITY</a> of people to pay for goods depends upon their level of income. Thus, this problem is concerned with the distribution of income among factors of production who <a href="https://interviewquestions.tuteehub.com/tag/contribute-409828" style="font-weight:bold;" target="_blank" title="Click to know more about CONTRIBUTE">CONTRIBUTE</a> in the production process. It has two aspects :(i) Personal distribution: It means how the national income of an economy is distributed among different groups of people in the society.(ii) Factoral distribution: It relates to income share of different factors of production such as wages for labour, <a href="https://interviewquestions.tuteehub.com/tag/interest-13407" style="font-weight:bold;" target="_blank" title="Click to know more about INTEREST">INTEREST</a> for capital, <a href="https://interviewquestions.tuteehub.com/tag/rent-1184968" style="font-weight:bold;" target="_blank" title="Click to know more about RENT">RENT</a> for land etc</body></html>


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