Sunday, February 14, 2010

Disposable personal income


To calculate disposable personal income the direct taxes are subtracted from income. That is, if from personal income, the direct taxes are subtracted, then the disposable personal income will be obtained. This amount is the part of the personal income which will be available to the people of the economy for their expenditure. The difference between the disposable personal income and the personal savings is the personal expenditure. This will also be used in paying the interest on the loan taken by the consumers for the consumption of goods and services.

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