In: Economics
Answer 1) Income is some amount which we earn in exchange of providing some goods or by rendering some services. Income can also be earned by investing our surplus funds into certain tools available for investment.
The five major types of Income are as follows:-
Answer 2) Detailed explanation of the above type of incomes
Answer 2 ( a ) Wage basically is the measure of monetary benefit imparted to the worker or employee corresponding to the standard units of working time or a standard amount of work completed. Going by the context of Economics, to earn a wage, the worker or an employee has to create an amount of revenue for the company. This is also called Workers Marginal Product or MPL.
Answer 2 ( b ) In the modern scenario nobody is unaware of the benefits of Investment. The Income of all individuals are generally divided into three broad parts i.e. Savings, Investment and Consumption. Whenever we invest our money anywhere we earn a certain amount of income on it known as the Interest Income like in Bonds, Mutual Funds, etc. Infact Interest Income is the driver which motivates us or gives us the incentive to invest out surplus cash. Interest income can also be earned by lending money. Whenever we lend our money to somebody we charge from them a certain amount i rerun of letting them use our money for a specific period of time. This is also known as Interest income and it is generally charged on the basis of some fixed percentage on the amount lent.