Which can be treated as property income of a factor of production in the income method?
Answer and explanation
Correct answer: Rent of land
Land is a factor of production, and rent is the payment received by its owner for allowing others to use it. Therefore, rent of land is property income and also factor income generated by a productive asset. A lottery prize and a government scholarship are transfer receipts because they are not paid for a factor service. A bank loan is borrowed finance and creates a liability, not income from supplying a factor.
Frequently asked questions
What is the correct answer to this question?
Rent of land
Why is this the correct answer?
Land is a factor of production, and rent is the payment received by its owner for allowing others to use it. Therefore, rent of land is property income and also factor income generated by a productive asset. A lottery prize and a government scholarship are transfer receipts because they are not paid for a factor service. A bank loan is borrowed finance and creates a liability, not income from supplying a factor.
Which subject and chapter does this question cover?
This is a Class 12 Economics question. Chapter: National Income and Related Aggregates. Topic: Methods of calculating national income - Income Method.
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