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Q: National Income–Undistributed profits–Net interest payments made by households–Corporate tax + Transfer payments to the households from the government and firms is.....
  • A. Personal income
  • B. Personal Disposable Income
  • C. Net National Product at factor cost
  • D. National Income
Correct Answer: Option A - Personal income refers to all the earnings being made by a household in a given year. it can be calculated as 1. Personal Income = national income (NI) - undistributed profits – net interest payment made by household – corporate tax + transfer payments to household from government and firms. 2. PI = NI + income earned but not received + income received but not earned. 3. PI = salaries/wages + interests + rent + dividends + any transfer payment 4. PI = NI - taxes on social security – corporate tax – undistributed profit + social security benefits + welfare benefits
A. Personal income refers to all the earnings being made by a household in a given year. it can be calculated as 1. Personal Income = national income (NI) - undistributed profits – net interest payment made by household – corporate tax + transfer payments to household from government and firms. 2. PI = NI + income earned but not received + income received but not earned. 3. PI = salaries/wages + interests + rent + dividends + any transfer payment 4. PI = NI - taxes on social security – corporate tax – undistributed profit + social security benefits + welfare benefits

Explanations:

Personal income refers to all the earnings being made by a household in a given year. it can be calculated as 1. Personal Income = national income (NI) - undistributed profits – net interest payment made by household – corporate tax + transfer payments to household from government and firms. 2. PI = NI + income earned but not received + income received but not earned. 3. PI = salaries/wages + interests + rent + dividends + any transfer payment 4. PI = NI - taxes on social security – corporate tax – undistributed profit + social security benefits + welfare benefits