Write short notes on: 4) Personal disposable income

Write short notes on:

4) Personal disposable income

Answer: 

Personal disposable income refers to that part of personal income that is actually available to households for consumption or for saving. Similar to the firms, the individuals also pay taxes and other payments (such as fees and fines) to the government. Such payments are deducted from the personal income to arrive at an estimate of the personal disposable income. This is because such payments are not available to individuals for consumption or saving.

Personal Disposable Income = Personal Income – Direct Personal Taxes – Miscellaneous Receipts of the Government (fees and fines).

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