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FACTOR PAYMENTS: Wage, interest, rent, and profit payments for the services of scarce resources, or the factors of production (labor, capital, land, and entrepreneurship), in return for productive services. Factor payments are frequently categorized according to the services of the productive resource. Wages are paid for the services of labor, interest is the payment for the services of capital, rent is the services for land, and profit is the factor payment to entrepreneurship. In the circular flow, these are payments made by the business sector for factor services purchased from the household sector through the financial markets.

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EXPLOITATION

The notion that capital owners and entrepreneurs of the second estate "take advantage" of workers of the third estate by paying them less than their contributions to production.

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Cyrus McCormick not only invented the reaper for harvesting grain, he also invented the installment payment for selling his reaper.
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