Personal Disposable Income is the final measure of income available to households for their spending and saving decisions.
Personal Disposable income is equal to
Asked in Protection Officer 2018 · Topic: National Income & Gross Domestic Product (National Income (NI), Personal Income (PI), Disposable Personal Income (DPI))
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Answer: D. Both Personal Income – Direct taxes and Con‐ sumption Expenditure + Savings
More Economic Development questions
- In order to obtain personal income from National Income, we must - (A) add to National Income, those incomes which are earned but not received. (B) subtract from National Income, those incomes which are received but currently not earned. Choose the correct option - (1) Both (A) and (B) are incorrect (2) Only (B) is correct (3) Only (A) is correct (4) Both (A) and (B) are correct (5) Question not attempted
- Transfer Payments Pensions, subsidies, gifts. Received by households, but not earned from current production. Not part of NI, but part of PI.Therefore, the formula is: PI = NI - (Undistributed Profits + Corporate Taxes + Social Security Contributions) + Transfer Payments.So, from NI to PI: - Undistributed profits, corporate taxes, social security contributions are SUBTRACTED. These are "earned but not received" in terms of direct personal income in the current period for shareholders/employees. Statement (A) says to ADD these. So (A) is false. - Transfer payments are ADDED.
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