Operating surplus refers to income from (a) property
(b) entrepreneurship
(c) both a and b
(d) neither a norb
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ans_ b(entrepreneurship)
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Operating surplus
Explanation:
- A country's domestic income comes from three sources: employee compensation, (ii) operating surplus. (iii) Self-employed with a mixed income.
- In an accounting year, domestic income is the sum of factor incomes generated by all producing units located within a country's domestic territory.
- It is the sum of all producing units in the domestic economy's net value added at FC, regardless of whether the producing unit is owned by a typical resident or a non-resident (foreigner). Domestic income can be divided into three categories:
- Income from work (i.e., employee remuneration), (ii) income from property (i.e., operating surplus), and (iii) income from self-employment. Simply explained, operating surplus is the difference between the net value added at FC and the compensation paid to personnel (traditionally called wages).
- To put it another way, operating surplus equals the total of rent, interest, and profit. Alternatively, operating surplus is the difference between property income (rent + interest) and entrepreneurship income (profit). Rent includes royalties.
- Operating surplus is a component of the Income Method for determining national money; it refers to income produced by property and business owners. It is divided into the following groups: 1) Rental revenue is money earned from a piece of real estate.
- 2) Royalty is a type of property-based income. 3) Interest is a type of property revenue. 4) Profit: This is the money made from running a business. Dividend: A portion of profit is delivered to shareholders as a dividend.
- Corporate tax: This is a portion of a company's profit that is paid to the government as a tax. iii) Profit that is not distributed: profit that is kept for future use.
Therefore, the operating surplus refers to income both from property and entrepreneurship.
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