Personal disposable income is ________.

Always equal to personal income

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Always more than personal income

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Equal to personal income minus direct taxes paid by household

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Equal to personal income minus indirect taxes

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Solution

The correct option is C Equal to personal income minus direct taxes paid by household
Disposable income is total personal income minus personal current taxes. In national accounts definitions, personal income minus personal current taxes equals disposable personal income. Subtracting personal outlays (which includes the major category of personal (or, private) consumption expenditure) yields personal (pr, private) savings.

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Q. ______ is the personal income minus personal income tax and miscellaneous payments to government.

Personal disposable income is equal to

Calculate National Income and Personal Disposable Income

$\begin{matrix} (Rs in Crores) (i) & Personal tax & 80 (ii) & Private final consumption expenditure & 600 (iii) & Undistributed profits & 30 (iv) & Private income & 650 (v) & Government final consumption expenditure & 100 (vi) & Corporate tax & 50 (vii) & Net domestic fixed capital formation & 70 (viii) & Net indirect tax & 60 (ix) & Depreciation & 14 (x) & Change in stocks & (-) 10 (xi) & Net imports & 20 (xii) & Net factor income to abroad & 10 \end{matrix}$

From the following data, calculate Personal Income and Personal Disposable Income.

		Rs (crore)
(a)	Net Domestic Product at factor cost	8,000
(b)	Net Factor Income from abroad	200
(c)	Undisbursed Profit	1,000
(d)	Corporate Tax	500
(e)	Interest Received by Households	1,500
(f)	Interest Paid by Households	1,200
(g)	Transfer Income	300
(h)	Personal Tax	500

Transfer payments are ______ income to get personal disposable income.

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