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Question
Distinguish between the following.
Personal income and Disposable income
Solution
|
Personal Income
|
Disposable Income |
| Personal income is the sum of all incomes actually received by an individual or household from all the sources during a given year. | There are other personal taxes which are not considered when calculating personal income. In order to derive disposable personal income we must subtract these personal taxes from personal income. |
| PI = Disposable Income + Personal Income Taxes. | DI = Personal Income - Personal Income Taxes. |
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PASSAGE
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