Which of the following is not a factor income?
Answers
Gifts from abroad are not a factor of income.
What do you know about the factor of income?
- A type of income that is generated from the different sources of production in a country is called factor income.
- Different categories of factors of production include land, labor, and capital.
- The flow of income from land is called rent, the flow of income from labor is wages and capital whose income is interest, and entrepreneurship whose income is profit.
- On the contrary, income that is not generated from either of these means of production or factors is not factor income e.g. donations and gifts.
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Answer:
The correct answer is C) Gift from abroad.
Gift from abroad is not a factor income.
Explanation:
I believe you were looking for this question only:
Which of the following is not considered a factor income?
A) Rent
B) Wages
C) Gift from abroad
D) Profit
Concept of factor income:
An income derived from any factor of production is called a factor income. There are basically four types of factor income, viz. Land, Labor, Capital and Enterprise, that provides Rent, Wages, Interest and Profit as income respectively.
Concept of unilateral transfer:
A unilateral transfer is a one-way transfer of money, goods, or services from one party to the other. It is often used to describe payments made by a government to their citizens, or from one country to another country in the form of foreign aid, grants, gifts, etc.
Therefore, Gifts from abroad are unilateral transfers which do not create any additional output the economy, and are thus not a part of factor income.