Disposable income is equal to

Question

Quizplus · Accepted Answer

Disposable income is the income that is available to households after deducting personal taxes and adding transfer payments. Therefore, it is equal to aggregate income minus taxes plus transfer payments. Option A includes government expenditures on goods and services, which is not counted in disposable income. Option B includes consumption expenditure, which is not part of disposable income. Option D only adds transfer payments to aggregate income and doesn't take taxes into account.

Disposable Income Is Equal to