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) = 5Solution
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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