![]() Also, proportional distribution of income across different factors is weighed. For instance, varying income derived from land, labor, capital and enterprise are factored in when estimating the total income generated by a country over a period of time. When carrying out a country-level analysis of income, factor income is considered. ![]() Also, since different factors of production give different rate of income, their difference can also be measured. Factor of income is also important in macroeconomic analysis. This is important in determining the income generated domestically and income generated by citizens abroad. Through factor income, the government of a nation can distinguish gross domestic product from gross national product. ![]() These are land, labour, capital and enterprise. Back to: ECONOMIC ANALYSIS & MONETARY POLICY How is Factor Income Used? There are four factors of production that a business needs to be able to produce their products or provide their service. Factor income are generated as follows rent is generated on land, wages from labor, interest is generated on capital and profit from enterprise. Different factors of production provide income through different means. Any return received or income generated on these factors of production is the factor income. There are four factors of production, they are Land, capital, labor and enterprise. ![]() In a capitalistic economy, profit is the. These factors influence economic growth, innovation and consumer habits. An income derived from any factor of production is called a factor income. The four factors of production are land, labor, capital and entrepreneurship. ![]()
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