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how do you increase real disposable income within an economy

how do you increase real disposable income within an economy

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Answer #1

Real disposable income is a post-tax and adjusted to the price level. To increase the real disposable income We can take to certain steps.  

  • Decrease the taxes on the economy. when the taxes are decreased by the fiscal policy the disposable income rises i.e. the people will have more income in the hand to spend on the demand they create.
  • Second, the government and the monetary authority can keep the inflation in check. the lower the inflation the higher the real disposable income will be in the economy.
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