Basic Concepts in Economics — Economics STD 11 Commerce / Arts — Question

Following are the various types of income.
(i) Fixed income: Income that remains stable over a period of time is called fixed income. It is always positive.
E.g. rent, wages, etc.

(ii) Fluctuating income: Income that is not fixed but keeps on changing is called Fluctuating income.
E.g. profit. It can be positive, negative, or zero.

(iii) Money income: Income received in the actual currency of the country is called Money income. It is the income in cash.
E.g. ₹ 70,000.

(iv) Real income: The purchasing power of money income is called Real income.
E.g. Commodities purchased out of money income.

(v) Contractual income: Income paid as per the terms and conditions of the contract is called Contractual income.
E.g. rent, wages, etc.

(vi) Residual income: Income that is left over after making payments to all factors of production is called residual income.
E.g. profit.

(vii) Earned income: Income obtained after participating in the productive activity is called Earned income.
E.g. rent, wages, interest, profit.

(viii) Unearned income: Income received from all sources without indulging in any productive activity is called Unearned income.
E.g. windfall gains, lottery prizes.
(ix) Economic activity: Economic activities can be classified into four types which include production, distribution, exchange, and consumption.