Question : Assertion: Disposable income is always greater than personal income.
Reason: Disposable income represents the amount of income available to individuals after paying personal income taxes.
Option 1: Both Assertion and Reason are true, and the Reason is the correct explanation of the Assertion.
Option 2: Both Assertion and Reason are true, but the Reason is not the correct explanation of the Assertion.
Option 3: Assertion is true, but the Reason is false.
Option 4: Assertion is false, but the Reason is true.
Correct Answer: Assertion is true, but the Reason is false.
Solution : The correct answer is (c) Assertion is true, but the Reason is false.
The Assertion is true in most cases. Disposable income typically represents the amount of income available to individuals after deducting personal income taxes and certain other mandatory deductions such as social security contributions. However, it's important to note that disposable income may also be affected by other factors such as voluntary deductions, non-tax-related expenses, and transfers.
The Reason is false because it simplifies the concept of disposable income by stating that it only accounts for personal income taxes. As mentioned earlier, disposable income considers various deductions and factors beyond personal income taxes.
Therefore, the correct answer is (c) Assertion is true, but the Reason is false.
Question : Assertion: Personal Disposable Income (PDI) represents the income available to individuals for consumption and savings after deducting personal income taxes.
Reason: Personal Disposable Income (PDI) is calculated by subtracting personal savings from personal income.
Question : Assertion: Net National Disposable Income (NNDI) represents the income available to the residents of a country for final consumption and savings.
Reason: Net National Disposable Income (NNDI) is obtained by subtracting net indirect taxes and depreciation from Gross
Question : Statement 1: Disposable income is always greater than personal income.
Statement 2: Disposable income represents the amount of income available to individuals after paying personal income taxes.
Question : Assertion: Gross National Disposable Income (GNDI) measures the total income available to the residents of a country for consumption and savings.
Reason: Gross National Disposable Income (GNDI) is calculated by subtracting net indirect taxes from Gross National Product
Question : Assertion: National income at factor cost is obtained by deducting net indirect taxes from national income.
Reason: Net indirect taxes represent the difference between indirect taxes and subsidies.
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