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From the following data, calculate personal income and personal disposable income.(a) Net domestic product at factor cost8,000(b) Net factor income from aboroad200(c) Undisbursed profit1,000(d) Corporate tax500(e) Interest received by households1,500(f) Interest paid by households1,200(g) Transfer income300(h) personal tax500 |
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Answer» Personal income = Net domestic product at factor cost + Net factor income from abroad + (Interest received by households – Interest paid by households) + Transfer income – Corporate tax – Undis-bursed profit. Therefore, PI = 8000+ 200+ (1500-1200)+ 300-500-1000. = 8000 + 200 + 300 + 300 – 500- 1000 = 7300 Personal disposable income = Personal income – Personal tax Therefore, PDI = 7300-500 = 6800. |
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