Question

Calculate Disposable income:

Consumption (C) = 300

Investment (I) = 50

Government purchases (G) = 70

Government transfer payments (TP) = 15

Taxes (T) = 75

Exports (X) = 10

Imports (M) = 5

A 425 Correct Answer Incorrect Answer
B 365 Correct Answer Incorrect Answer
C 300 Correct Answer Incorrect Answer
D 450 Correct Answer Incorrect Answer
E 395 Correct Answer Incorrect Answer

Solution

Y= C + I + G + (X-M) Y = 300 + 50+ 5 + 70 Y=425 Disposable Income= Gross Income - Taxes + Transfer Payments DI = Y - T + TP DI = 425 - 75 + 15 DI = 365

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