Final answer:
Household income in the United States mainly comes from wages and salaries, proprietors' income, corporate profits, interest income, and rents. Personal income includes all these sources and when adjusted for taxes and transfers, it becomes disposable income.
Step-by-step explanation:
In a market economy like that of the United States, the primary sources of household income include:
- Wages and salaries: This is the income derived from employment which includes hourly pays, annual salaries, commissions, tips, and other forms of earnings from labor.
- Proprietors' income: Earnings from owning a business or being self-employed.
- Corporate profits: Earnings from owning shares in businesses or corporations.
- Interest income: This is the money earned from lending money or from investments in saving accounts, bonds, or other interest-bearing assets.
- Rents: Revenue generated from owning and leasing properties to tenants.
Personal income consists of all the above, also including dividends and other earnings, which leads to disposable income after taxes and governmental transfers are accounted for.