WBCS.LIVE practice question

Personal Disposable Income (PDI) is mathematically defined as:

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. National Income minus Corporate Taxes.
  2. Personal Income minus Personal Direct Taxes.
  3. Gross Domestic Product minus Depreciation.
  4. Personal Income minus Indirect Taxes.

Correct answer and explanation

Correct answer: Personal Income minus Personal Direct Taxes.

Explanation: āœ… Correct Answer: B) Personal Income minus Personal Direct Taxes. šŸ“š Explanation: Personal Disposable Income (PDI) represents the actual amount of money that households have available for spending and saving after income taxes have been accounted for. It is mathematically calculated by subtracting Personal Direct Taxes from total Personal Income. This metric is a crucial macroeconomic indicator because it directly dictates the aggregate consumer demand within an economy.