![]() Similarly, the fewer skills required for the job, the more people there will be who are able to do it, creating a buyers’ market. If there are fewer people willing and able to do a job than there are jobs, then that labor market is a sellers’ market, and workers can sell their labor at higher prices. That labor market is a buyers’ market, and the buyers can hire labor at lower prices. If the supply of labor is greater than the demand, if there are more people to work at a job than are needed, then employers will have more hiring choices. In turn, the skills needed and the attractiveness of the work determine the supply of labor for that particular job-the number of people who could and would want to do the job. The nature of the work defines the education and skills required, and the price may reflect other factors as well, such as the status or desirability of the job. ![]() For any given job, that price is determined by many factors. In the labor market, the price of labor is the wage that an employer (buyer of labor) is willing to pay to the employee (seller of labor). Figure 2.2 "Sources of Income" shows the sources of income. Capital is sold in the capital market and lent in the credit market-a specific part of the capital market (just like the dairy section is a specific part of the supermarket). The principle is the same: investing is renting capital or selling it for an asset that can be resold later, or that can create future income, or both. You can invest in many other kinds of assets, like antiques, art, coins, land, or commodities such as soybeans, live cattle, platinum, or light crude oil. Investing in or buying corporate stock is an example of selling capital in exchange for a share of the company’s future value. You can lend privately by direct arrangement with a borrower, or you can lend through a public debt exchange by buying corporate, government, or government agency bonds. Lending is renting out capital the interest is the rent. Selling capital means investing: taking excess cash and selling it or renting it to someone who needs liquidity Nearness to cash, or how easily and cheaply-with low transaction costs-an asset can be turned into cash. Total compensation may include other benefits, such as retirement contributions, health insurance, or life insurance. ![]() Selling labor means working, either for someone else or for yourself. The two fundamental ways of earning income in a market-based economy are by selling labor or selling capital. Owning a piece of a partnership or a privately held corporation entitles one to a draw. Owning stock entitles the shareholder to a dividend, if there is one. Deposit accounts, like savings accounts, earn interest, which could also come from lending. Income from employment or self-employment is wages or salary. There are various terms for income because there are various ways of earning income. is what is earned or received in a given period. In the case of an indivdual or household, this is generally cash from wages, interest, dividends, or assets (such as rental income from real estate) that can be used for consumption or saved.
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |