Economics Unit 2

Distribution of income and wealth

Earned income

Earned income is money received in exchange for active work, labor, or services provided.

Unearned income

Unearned income in economics refers to money received from sources other than active employment, labour, or direct business operations

Wealth

Wealth is the total value of a person’s assets

Income

Income is the money received over time by a person, business, or government

Gross income

Gross income is the income an individual or household has before tax

Disposable income

Disposable income is the income an individual or household has after necessary payments

Factor income

Factor income is the income earnt from supplying factors of production

Transfer income

Transfer income is money received from a government or donor without providing any goods, services, or labour in return

Social wage income

The social wage is the indirect, collective income workers receive through government-funded public goods, services, and welfare benefits

Final income

Final income is the income that households have available after taxes and government transfers.

EDHI (equivalised disposable income)

EDHI is the income available to households after taxes and government transfers, adjusted for the size and composition of the household.

Private/Market income

Market/Private income is income received from private sources, such as wages, business income and investment income. It excludes government benefits.