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    Question

    What is personal

    income?
    A The income earned by individuals and households after taxes and other deductions Correct Answer Incorrect Answer
    B The total income earned by businesses and corporations in an economy Correct Answer Incorrect Answer
    C The income earned by individuals through their own business or self-employment Correct Answer Incorrect Answer
    D The total income earned by individuals and households before taxes and other deductions Correct Answer Incorrect Answer

    Solution

    Personal income is the total income received by individuals and households from all sources before taxes. It includes various types of income such as: Wages and Salaries: The income individuals earn from their jobs. Rental Income: Income earned from renting out properties. Interest Income: Income received from investments such as savings accounts, bonds, and other interest-bearing accounts. Dividends: Income received from owning shares in companies. Transfer Payments: Payments received from the government such as social security benefits, unemployment benefits, and welfare payments. Proprietor’s Income: Income from self-employment and business ownership. Other Income: Any other sources of income that do not fall into the above categories. Personal income serves as a measure of the economic well-being of individuals and households and is used to assess the capacity of consumers to spend and save, which in turn impacts the overall economy.

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