Q.What is meant by distribution ? What are its kinds ?

Distribution is the sharing of the community's total output/national income among the factors of production; it is studied as functional distribution (reward by function) and personal distribution (reward by persons).

Meaning. Production is a joint effort of land, labour, capital and enterprise. Once the output is produced, it must be shared among these factors. This sharing of the national income among the factors that helped create it is called distribution. Each factor gets a reward: land earns rent, labour earns wages, capital earns interest, and the entrepreneur earns profit.

Kinds of distribution.

1. Functional (factor) distribution — income is divided according to the function performed by each factor of production. It answers: what share of the national income goes to rent, wages, interest and profit? This is the main concern of the theory of distribution in the TN HSC Class-11 Economics course. …