Concept in Definition ABC

In the field of economy, the concept of income is undoubtedly one of the most essential and relevant elements with which you can work. We understand by income all the profits that enter to the total set of the budget of an entity, whether public or private, individual or group. In more general terms, income is both the monetary and non-monetary elements that accumulate and that generate as a consequence a circle consumption-profit.

As can be seen then, the term income is related both to various economic aspects but also social since the existence or not of them can determine the type of quality of life of a family or individual, as well as the productive capacities of a company or economic entity. Income also serves as an engine for future investment and growth since, apart from serving to improve living conditions, they can be used in part to maintain and increase the dynamic productive. This generates a flow of elements (which may or may not be money) that enters constantly movement and dynamism.

The equation of rent or income per capita seeks to represent the percentage of income that each inhabitant of a politically definable region should receive according to its gross domestic product. In other words, using a simplified example, if a region has a gross domestic product of $ 1,000,000 per year and a population of 1,000,000 inhabitants, each inhabitant corresponds to one dollar of investment per year. This relationship between the income of each inhabitant and the gross domestic product is useful to understand the wealth of a territory more than to know how much each individual should earn or receive since those percentages are not easily applicable in reality.

This is finally where the idea of inequality in income, a characteristic element of current capitalist societies (although present throughout the history of Humanity), in the which a small portion of the population owns a central part of the wealth while the rest of the inhabitants are mired in misery and the poverty.