INCOME

In measuring the economic status of a person or a nation, the two yardsticks most often used are income and wealth. Income refers to the flow of wages, interest payments, dividends, and other things of value accruing during a period of time (usually a year). The aggregate of all incomes is national income, the components of which are shown in Table 12-1. The biggest share of national income goes to labor,either as wages or salaries or as fringe benefits. The , remainder goes to the different types of property income: rent, net interest, corporate profits, and income. This last category basically includes the returns to the owners of small businesses. 1 The earnings in a market economy are distributed ,to the owners of the economy’s factors of production in the form of wages, profits, rent, and interest.

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