Q.Explain the concepts of Wealth and Income. How do they differ?

Wealth and income are two of the most commonly confused terms in everyday language, but Economics distinguishes them sharply. …

Wealth is the stock of economic goods — material, transferable, scarce, and possessing money value — that a person or nation owns at a given point in time; a person's land, house, jewellery, bank balance and shares together form their wealth at that instant. Income, by contrast, is a flow concept: the earnings, in money or in kind, that a person or a factor of production receives over a period of time (a month or a year) in return for productive services rendered — wages for labour, rent for land, interest for capital, and profit for entrepreneurship. When such income flows are added up for an entire country over a year, the result is the country's National Income. The essential distinction is that wealth is measured at a point in time (a stock), while income is measured over a period of tim …

Students often use "wealth" and "income" as synonyms in everyday sense; the stock-versus-flow distinction, with the …