Contractual Income and Residual Income.
Distinguish between:
Contractual Income and Residual Income.
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| Contractual Income | Residual Income |
| (i) When income is given as per the terms and conditions of the contract it is called contractual income. | (i) The income which is left over after making payment to other factors of production is called residual income. |
| (ii) Rent, Wages, etc. are examples of contractual income. | (ii) Profit is an example of residual income. |
| (iii) Contractual income is fixed and certain. | (iii) Residual income is fluctuating and uncertain. |
| (iv) It is neither zero nor negative. | (iv) It can be zero or even negative. |
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