Final answer:
Income mobility is the ability to improve one's economic situations over time, related to changes in income or social class. This can occur through labor income, property rentals, or investment earnings, and can be influenced by education, job changes, or other life events.
Step-by-step explanation:
Income mobility is the ability to improve one's economic circumstances over time. It is crucial in a market economy where income largely comes from ownership of resources or labor, and upward mobility refers to moving to a higher socio-economic class. Social mobility is broad, encompassing intragenerational mobility which is the change in social status over an individual's lifetime, and also broader trends such as how increases in national incomes in other countries can affect a nation's exports, reflecting an 'Income Effect'.
People experience social mobility, either upward or downward, for many reasons, including education, changes in the labor market, illness, or changes in marital status. In a market economy, people's labor is usually their most important resource; wages, salaries, and other types of labor income depend on how much work they do and the wages paid. Other forms of income include rental income from real estate, or earnings from financial assets like bank accounts, stocks, and bonds.