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What are the four factors of production and what are the remunerations to each of these called?
The four factors of production are –
a) Land - It is the gift of nature and it is called natural, original or primary factor of production.
b) Labour - It is a person engaged in some physical work, it is called human factor of production.
c) Capital - It means wealth, money or income which is invested in business, it helps in production function.
d) Entrepreneur - It is the work of an entrepreneur to bring the required factors together and work harmoniously.
The remuneration paid to each of these factors are –
•Rent for land
•Wages and salaries for labour
•Interest for capital and
•Profit for entrepreneur
From the following data, calculate Personal Income and Personal Disposable Income.
Rs (crore) | |
(a) Net Domestic Product at factor cost | 8,000 |
(b) Net Factor Income from abroad | 200 |
(c) Undisbursed Profit | 1,000 |
(d) Corporate Tax | 500 |
(e) Interest Received by Households | 1,500 |
(f) Interest Paid by Households | 1,200 |
(g) Transfer Income | 300 |
(h) Personal Tax | 500 |