Q.Write a short note on: Disposable Income

Disposable income is the income actually available to households for spending and saving after paying direct taxes = personal income minus direct taxes.

Explanation

Personal disposable income is the part of personal income that remains with individuals or households for their own use after they have paid all personal direct taxes (such as income tax) and other compulsory payments to the government. It is the income over which people have full command — they can spend it on consumption or keep it as saving. Thus:

Disposable Income = Personal Income − Personal (direct) Taxes, and

Disposable Income = Consumption + Saving.

…