Question

Which income is not called factor income

Answer 1

Answer:

Factors of production include: land whose income is rent, labor whose income is wages and capital whose income is interest and entrepreneurship whose income is profit. Income that is not derived from either of these factors is not factor income e.g. donations and gifts.

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Answer 2

• Income which is received without providing any goods or service for which is received without performing any economic activity is not an example of factor income.  
• Gift and donation are examples of transfer income which is not a part of factor income.  
• Factor income is that income which is held by the four factors of production namely land capital labour and enterprise.
• The rent received on land, the return on capital, the wages of the labour and the profit which is earned by the entrepreneurs are examples of factor income.  
• These are earned after doing some kind of economic activity.