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.
Option 1: Statement 1 is true, and Statement 2 is false.
Option 2: Statement 1 is false, and Statement 2 is true.
Option 3: Both Statement 1 and Statement 2 are true.
Option 4: Both Statement 1 and Statement 2 are false.
Correct Answer: Statement 1 is false, and Statement 2 is true.
Solution : The correct answer is (b) Statement 1 is false, and Statement 2 is true.
Statement 1 is false: Disposable income is not always greater than personal income. Disposable income represents the amount of income available to individuals after deducting personal income taxes and other mandatory contributions. It is possible for personal income to be greater than disposable income if an individual has significant tax liabilities or other deductions.
Statement 2 is true: Disposable income does represent the amount of income available to individuals after paying personal income taxes. It reflects the portion of income that individuals have available for consumption and savings.
Therefore, Statement 1 is false, and Statement 2 is true.
