Question

Gross Investment $18
National Income 100
Net Exports 2
Personal Income 85
Personal Consumption Expenditures 70
Saving 5
Purchases 20
Net Domestic Product 105
Statistical Discrepancy 0

Refer to the accompanying data (all figures in billions of dollars). Disposable income is:

Answer 1

Answer:

$75 billion

Explanation:

Recall that

Disposable Income = Personal Income - (Personal taxes + other deductions)

OR

Disposable income = Consumption + Savings.

Given that

Personal Consumption expenditure = $70 billion

Savings = $5billion

We use the second formula.

Thus,

Disposable income = 70 + 5

= 75

Hence, from the given set of data, disposable income = $75 billion.