Explain the central problem of distribution of income. (2024)

For whom to produce means that how should the goods and services produced be allocated among people. Goods and services are purchased by those who have incomes which are earned in the process of production. Therefore the problem amounts to a distribution of income among people.Detailed Answer:This problem is concerned with the distributionof income in an economy. It is concerned with either to produce goods for high-income groups or low- income groups. The capacity of people to pay for goods depends upon their level of income. Thus this problem is concerned with the distribution of income among factors of production who contributeinthe production process. It has two aspects :i Personal distribution:It means how the national income of an economy is distributed among different groups of people in the society.iiFactoraldistribution:It relates to income share of different factors of production such as wages for labour interest for capital rent for land etc

Explain the central problem of distribution of income. (2024)
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