Disposable income is less than GDP due to
A)Taxes by governments along with exports.
B)Income held by businesses.
C)Taxes by governments and income held back as saving by businesses.
D)Taxes by governments along with imports.

Question

Quizplus · Accepted Answer

Disposable income is the income that is available to households for spending and saving after taxes and transfers have been accounted for. Therefore, taxes by governments reduce disposable income, as well as any income held back as savings by businesses. Income held by businesses does not directly affect disposable income as it is not in the hands of households. Exports and imports are not directly related to disposable income.

Disposable Income Is Less Than GDP Due to