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Revision as of 06:13, 21 November 2021 by MuchenLin (talk | contribs)(diff) ← Previous revision | Latest revision (diff) | Newer revision → (diff)Income is defined as the amount of money received by an individual during a specific period of time. An individual's income includes their salary, selling of goods and services, profits from investments and other aspects relating to generating revenue.Cite error: There are <ref> tags on this page without content in them (see the help page). The term "income" could also be categorized as Capital Gain Income or Passive Income. Capital gain income would be interpreted as the selling price an individual receive from selling an investment minus the purchase price of the investment. On the other hand, Passive income would be revenue derived from owning assets, such as rental from properties, dividends from stocks and real estate investment trust, without actually doing any work.Cite error: There are <ref> tags on this page without content in them (see the help page).
Taking into consideration a company's income statement, its gross profit would be the company's revenue minus its cost of goods sold. Furthermore, the company's net income would appear at the bottom of its income statement, after deducing all its expenses and taxes. Looking at the economic aspect of income, income is often associated to equality and the economy. When relating to the economy, income could potentially be viewed as income per capita, the average income earned per individual in a country. This is calculated by dividing the total income of the country by the country's population size. Many factors have significantly affect a country's income per capita. Aspects such as having better educational system, globalization and other factors.Cite error: There are <ref> tags on this page without content in them (see the help page).
On the contrary, income inequality is how unevenly income is distributed over the country's entire population. The Gini Coefficient, also known as the Gini Index, can be used to measure the distribution of income inequality of a country, ranging from 0 to 1. If a country were to have a Gini coefficient of 0, it shows that the country has a perfect income equality while having a Gini coefficient of 1 means that the country has a perfect income inequality. The formula of the Gini coefficient is the area above the Lorenz curve over the sum of the areas above and below the Lorenz curve.
References
https://www.investopedia.com/terms/i/income-inequality.asp https://fourpillarfreedom.com/types-of-income/ https://en.wikipedia.org/Economic_inequality