II. Read the text to fulfil the tasks. 1. National wealth, national income and labour.In general, national wealth may be described as all consumer's goods and capital goods possessed by the State

1. National wealth, national income and labour.In general, national wealth may be described as all consumer's goods and capital goods possessed by the State or individuals of the country. This includes investments abroad, but excludes foreigners' investments in the home country. Roads, railways, bridges, etc. are included in the term "national wealth". It does not include internal debts, either the Government's debts to the individuals or those of one individual to another.

The current income of a nation as a whole is called national income. This includes the value of all goods and services produced currently during the year. It includes only those services for which payments are made.

All the income of the country is distributed to the citizens through the factor of production they offer to the productive system of the country. If they offer land they earn rent; for labour, wages; for capital, interest; and for organization, profits. Any type of earning of the citizens falls under one the other of these categories. This classification of earnings is based upon the traditional classification of the factors of production into land, labour, capital and organization. It does not have much economic significance, and in practice many earnings are of mixed nature.

From the economic point of view labour is only one of the several factors of production, and as such, even to give it a special classification in Economics is theoretically speaking wrong. If the labourer is a means of production, as a human being he is also a consumer, i.e. all productive activities are directed towards him as for all other consumers. Wages that are earned by the labour have been a matter of much discussion, mainly because human beings in general and the poor and middle classes in particular, are effected by the wages.

2. Wages: theory and practice.The modern theory of wages is simple. It states that wages are the price of labour, and like any other price, this price also is determined by supply and demand. A discussion regarding supply and demand of labour will clarify this. Supply of labour is, in a sense of course, the total population of the country or of the world as a whole. From the point of view; of any single industry or occupation, however, the supply of labour depends upon several conditions. First of all, the supply of labour in any occupation is restricted by the cost of training for the job. The supply of doctors, engineers and members of other highly skilled professions is limited because the education for these professions is very costly. Persons wishing to be trained for these skilled professions, again, have to spend a number of years in receiving their education, and that involves much loss of earnings. These are some of the reasons why the supply of labour in skilled professions is limited.

We should rather say that wages should be paid according to the productivity of labour. The employers should not pay less, and the labourers should not demand more wages than the productivity of labour justifies. If the labourers want to earn more, they must work more, increase their productivity and then ask for higher wages. If the wages are high, prices would rise. When prices rise, demand contracts. When demand contracts, the employers earn less profits, or may even suffer losses in business. Therefore, they would close down the factories or reduce the output. This would mean that many labourers would be dismissed. The net result, therefore, of fixing minimum wages is unemployment for the labourers. The remedy for this situation is that wages should be reduced to the level of productivity, so that prices may fall and demand may expand. When the Demand expands, the employers would again start working in their factories increase the output. This would again give employment to the workers. This example proves that wages should be just equal to the marginal productivity of labour; neither more, nor less.