Unearned Increment for Dummies
noun
pronunciation: ən'ɜrnd_'ɪnkrəməntWhat does Unearned Increment really mean?
Hey there, let's talk about the term "Unearned Increment." It might sound a bit complex at first, but don't worry, I'll break it down for you with easy words and examples.
So, imagine you have a piece of land that you're planning to sell in the future. Over time, the value of that land increases, and when you finally sell it, you make a profit. Now, here's the thing: some of that profit you made is because of your efforts, like improving the land or attracting buyers. This part is the "earned" increment because you worked for it.
But wait, there's more! Another portion of the profit you made comes from external factors that you didn't have control over or actively work for. This part is the "unearned" increment. It's like receiving a bonus without doing anything special to deserve it. It just happened because of certain circumstances.
An example might help. Let's say you bought a house in a neighborhood, and the city decides to build a beautiful park nearby. Suddenly, the value of your house increases, although you didn't do anything to make that happen. That increase in value is the "unearned increment," the part of the profit that comes from outside factors or changes in the surroundings that you didn't contribute to.
Now, this term can also have another meaning, especially when we talk about economics or society as a whole. In that context, "unearned increment" refers to the increase in value of certain things without putting in any additional effort. It can happen when land or real estate prices go up due to demand or scarcity, or when the value of certain resources like oil or gold surges. Basically, it means making money without actively doing anything extra to earn it.
So, to sum it up, "unearned increment" means the part of profit, value, or increase in worth that you receive or experience without actively working for it or contributing to it. It can happen on a personal level, like the example of the land or the house, or on a larger scale, like the increase in resources' value in the market. It's like getting a lucky break or a bonus that you didn't really work hard for.
I hope this explanation helps you understand the concept of "unearned increment" better. Feel free to ask any questions or if there's anything else you'd like to know!
Revised and Fact checked by Olivia Brown on 2023-10-29 22:04:20
Unearned Increment In a sentece
Learn how to use Unearned Increment inside a sentece
- When someone buys a piece of land in a quiet area, and then the government decides to build a new road nearby, the value of that land increases without the owner making any effort. This increase in value is called unearned increment.
- Imagine you have a small garden, and you plant a tree in it. After a few years, the tree grows big and becomes very popular in the neighborhood. Now, if you decide to sell your house, you can ask for a higher price because the tree has added value to your property. This increase in value without you doing anything is known as unearned increment.
- Let's say a person buys an old and run-down house in a neglected neighborhood. Over time, people start moving into the area, shops open up, schools are built, and the neighborhood becomes more desirable. As a result, the value of the house automatically increases, and the owner can sell it for a higher price. This increase in value without any effort from the owner is unearned increment.
- Suppose you have a rare collection of sports trading cards. You bought them for a low price because not many people were interested in them at the time. But later, the popularity of those cards skyrocketed, and their value increased significantly. The extra amount of money you can get by selling them now is considered unearned increment.
- Imagine you start a small business selling handmade crafts. Your products become incredibly popular, and people are willing to pay much more money for them than when you first started. This increase in the value of your products without you doing anything extra is unearned increment.
Unearned Increment Hypernyms
Words that are more generic than the original word.