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.
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 true, and Statement 2 is false.
Solution : The correct answer is (a) Statement 1 is true, and Statement 2 is false.
Statement 1 is true. Personal Disposable Income (PDI) does represent the income available to individuals for consumption and savings. It is the amount of income that individuals have at their disposal after deducting personal income taxes.
Statement 2 is false. Personal Savings is not calculated by subtracting personal taxes from personal income. Personal savings represent the portion of personal income that is not spent on consumption. It is calculated by subtracting personal consumption expenditures from personal income.
Therefore, the Statement 1 is true, and Statement 2 is false.
