Which of the following is true of disposable income?
A)It excludes transfer payments.
B)It is the portion of income that is used solely for consumption.
C)It is that part of total earned income that is paid to the government in the form of taxes.
D)It is the difference between income and saving.
E)It equals consumption expenditures plus saving.

Question

Quizplus · Accepted Answer

Disposable income is the income that households have available for spending and saving after taxes have been paid and transfer payments such as welfare or unemployment are received. Therefore, disposable income equals consumption expenditures plus saving.

Which of the Following Is True of Disposable Income