In the simple macroeconomic model, disposable income is the income that households can use for
Correct answer: A. Consumption and saving after personal taxes
- A. Consumption and saving after personal taxes
- B. Imports and exports before government taxes
- C. Government purchases and private investment
- D. Wages and profits before production costs
Explanation
Disposable income is personal income remaining after direct personal taxes and transfer adjustments. Households allocate this income mainly between consumption and saving.
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About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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