In a typical year which of the following measures of aggregate output and income is likely to be the smallest?
A)gross domestic product
B)net domestic income
C)disposable income
D)personal income

Question

Quizplus · Accepted Answer

Disposable income is likely to be the smallest measure of aggregate output and income because it is calculated as personal income minus personal taxes, which reduces the amount available for spending and saving. Gross domestic product (A) measures the total value of all goods and services produced in a country, so it is usually higher than other measures. Net domestic income (B) measures the income generated by production after deducting depreciation and other adjustments, so it is typically higher than disposable income. Personal income (D) is the total income received by individuals, including wages, profits, and transfer payments, and is also typically higher than disposable income.

In a Typical Year Which of the Following Measures of Aggregate