Chapter 7 Personal economics
Chapter 7 Personal Economics
7.1 SOURSE OF INCOME IN MODERN ECONOMIES o Personal income ● by individuals ● per period o earning from selling the factors of production ● Components ●wage- personal labor o rent-use of capital infrastructure (land -classical e) o interest use of money profit -enterprise or entrepreneurship( use of a good idea or running a business)
7.1 SOURSE OF INCOME IN MODERN ECONOMIES ⚫ Personal income ⚫ by individuals ⚫ per period ⚫ earning from selling the factors of production ⚫ Components ⚫ wage – personal labor ⚫ rent – use of capital infrastructure (land – classical E) ⚫ interest – use of money ⚫ profit – enterprise or entrepreneurship (use of a good idea or running a business)
1 Investment Real investments o purchases of machinery or productive capacity and purchases of land and improvements Financial investments o return income to the owner oe.g. shares or equities, bonds or notes, deposits or loans
1. Investment ⚫ Real investments ⚫ purchases of machinery or productive capacity and purchases of land and improvements. ⚫ Financial investments ⚫ return income to the owner ⚫ e.g. shares or equities, bonds or notes, deposits or loans
2. Payment from investment ● interests o payments from bonds, notes, debentures bank deposits term loans dividends payments from shares dividend imputation o Capital gain/Capital loss o investors sell investments for more/less than they paid for them o Transaction costs: stamp duty, brokers' fees
2. Payment from investment ⚫ interests ⚫ payments from bonds, notes, debentures, bank deposits, term loans ⚫ dividends ⚫ payments from shares ⚫ dividend imputation ⚫ Capital gain/Capital loss ⚫ investors sell investments for more/less than they paid for them ⚫ Transaction costs: stamp duty, brokers’ fees…
Stamp duty Definition o a tax collected by means of stamp purchased and affixed ( as a deck of playing cards); specially, such a tax on a document (as a deed or promissory note) ● object e economic contracts property right transference statements account book license and other warrants qualified by the ministry of Finance axpayer contract makers account book makers credential makers
Stamp Duty ⚫ Definition ⚫ a tax collected by means of stamp purchased and affixed (as a deck of playing cards); specially, such a tax on a document (as a deed or promissory note) ⚫ Object ⚫ economic contracts ⚫ property right transference statements ⚫ account book ⚫ license and other warrants qualified by the Ministry of Finance ⚫ Taxpayer ⚫ contract makers ⚫ account book makers ⚫ credential makers