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.
Question : Statement 1: Personal Savings represents the amount of income saved by individuals after deducting personal taxes.
Statement 2: Personal Saving is a component of disposable income.
Question : Statement 1: Personal Disposable Income (PDI) represents the income available to individuals for consumption and savings.
Statement 2: Personal Savings is calculated by subtracting personal taxes from personal income.
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.
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 : Statement 1: National income at factor cost is obtained by adding indirect taxes to the net national product.
Statement 2: Indirect taxes are taxes levied on the production and sale of goods and services.
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile