Question

Short answer questions:

1. Distinguish between income and disposable income.

Answer 1

Income means the total amount of money got by a household from different sources. It may be through salary, rent etc

Disposable income is an important criteria used to assess the financial resources of a household. It is the amount of money that households have available for spending and saving after income taxes have been accounted for.

For example, the income of a household is $10000. So money they get after remitting tax is (tax=25%) is $7500. So the disposable income is $7500.

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