State and explain the income obtained through factors of production.

1.	State and explain the income obtained through factors of production.
Answer» Incomes that are considered: 1. Income earned from factors of production: (A) Income of rent: The rent obtained on land/building. Those who live in their own house do not need to pay rent. This benefit of rent that they get is a part of their income and is called imputed rent. ‘ It is considered in national income. The income obtained through various rights such as copy right of a book, patent, etc. (B) Income of interest: The interest obtained by people on their capital during a year. The interest obtained from the government is not considered as income. The reason for this is that a state generates income through taxes and pays it as interest which means that the money is simply transferred. (C) Income of wages: The wage or salary given to labourers for their work during a year. (D) Income of profit: The income obtained in the form of profit or dividend by investor/. It includes reserved profit and taxes paid on it.

Answer»

Incomes that are considered:

1. Income earned from factors of production:

(A) Income of rent:

The rent obtained on land/building.
Those who live in their own house do not need to pay rent. This benefit of rent that they get is a part of their income and is called imputed rent. ‘ It is considered in national income.
The income obtained through various rights such as copy right of a book, patent, etc.

(B) Income of interest:

The interest obtained by people on their capital during a year.
The interest obtained from the government is not considered as income. The reason for this is that a state generates income through taxes and pays it as interest which means that the money is simply transferred.

(C) Income of wages:

The wage or salary given to labourers for their work during a year.

(D) Income of profit:

The income obtained in the form of profit or dividend by investor/. It includes reserved profit and taxes paid on it.

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