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What do you understand by real income? Define its two types and two ways of increasing this income. |
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Answer» Real Income: is the flow of goods and services that is available for certain period of time to meet the needs of the family. It is of two types. Direct Real Income: is income which is received by members of the family without using money. Example are use of family assets, use of community facilities, skill of family members. Indirect Real Income: Income which is generated by the family members with some medium of exchange, usually money is involved. Examples are: i. Goods & services by paying money ii. Fringe benefit iii. Barter system Increasing Direct Real Income: i. Using skill of family members such as stitching of clothes, gardening, making pickles etc. ii. Study home and not taking tuitions. iii. Taking home made tiffin iv. Using carpool & public transport Increasing Indirect Real Income: i. Hire maid for services. ii. Buying labor saving devices. iii. Company’s accommodation. iv. Reimbursement of bills |
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