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In the context of economic activities, what term refers to the division of income among the factors of production?
- a)Consumption
- b)Production
- c)Distribution
- d)Satisfaction of Needs and Wants
Correct answer is option 'C'. Can you explain this answer?
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In the context of economic activities, what term refers to the divisio...
The division of income among the factors of production is referred to as distribution. This process involves allocating the earnings generated from economic activities to the various factors of production, including land, labor, capital, and entrepreneurship. Distribution plays a crucial role in determining how income is shared among individuals and entities involved in the production process.
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In the context of economic activities, what term refers to the divisio...
Division of Income among Factors of Production
The term that refers to the division of income among the factors of production is distribution. In economic activities, distribution plays a crucial role in determining how the income generated from production is allocated among the factors of production.
Factors of Production
Factors of production refer to the resources that are used in the production of goods and services. These factors include land, labor, capital, and entrepreneurship. Each factor contributes to the production process and is rewarded with income in the form of rent, wages, interest, and profits.
Income Distribution
Income distribution involves the allocation of the total income generated in the economy among the various factors of production. This process determines how much each factor receives as a reward for its contribution to the production process.
Importance of Income Distribution
- Fair distribution of income ensures that all factors of production are adequately rewarded for their contribution.
- Income distribution affects the overall economic well-being of society by influencing the purchasing power of individuals.
- Unequal income distribution can lead to social issues such as poverty and inequality.
Methods of Income Distribution
There are various methods of income distribution, including:
- Rent for the use of land
- Wages for labor services
- Interest for the use of capital
- Profits for entrepreneurship
Conclusion
In conclusion, distribution refers to the division of income among the factors of production in economic activities. It is essential to ensure a fair and equitable distribution of income to promote economic growth and social welfare.
The term that refers to the division of income among the factors of production is distribution. In economic activities, distribution plays a crucial role in determining how the income generated from production is allocated among the factors of production.
Factors of Production
Factors of production refer to the resources that are used in the production of goods and services. These factors include land, labor, capital, and entrepreneurship. Each factor contributes to the production process and is rewarded with income in the form of rent, wages, interest, and profits.
Income Distribution
Income distribution involves the allocation of the total income generated in the economy among the various factors of production. This process determines how much each factor receives as a reward for its contribution to the production process.
Importance of Income Distribution
- Fair distribution of income ensures that all factors of production are adequately rewarded for their contribution.
- Income distribution affects the overall economic well-being of society by influencing the purchasing power of individuals.
- Unequal income distribution can lead to social issues such as poverty and inequality.
Methods of Income Distribution
There are various methods of income distribution, including:
- Rent for the use of land
- Wages for labor services
- Interest for the use of capital
- Profits for entrepreneurship
Conclusion
In conclusion, distribution refers to the division of income among the factors of production in economic activities. It is essential to ensure a fair and equitable distribution of income to promote economic growth and social welfare.
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In the context of economic activities, what term refers to the division of income among the factors of production?a) Consumptionb) Productionc) Distributiond) Satisfaction of Needs and WantsCorrect answer is option 'C'. Can you explain this answer?
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