Question

What are transfer income and factor income? Give suitable examples also.
class 12th Economics​

Answer 1

Answer:

The difference between the two is whether or not the income (payment) received is for rendering productive service. Payment received in exchange for rendering productive service is factor income whereas the one received without providing any service (or good) in return is transfer income.

Examples of transfer payments include welfare, financial aid, social security, and government making subsidies for certain businesses.

Factors of production include land, labor, and capital. Factor income on the use of land is called rent, income generated from labor is called wages, and income generated from capital is called profit.

Explanation:

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Answer 2

Explanation:

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