In the context of national income, 'Personal Income' is equal to:
A. GDP − Depreciation
B. National income + Corporate taxes
C. National income − Corporate taxes − Undistributed profits + Transfer payments
D. GNP − Net factor income from abroad
Answer: Option C
Solution (By JKSSB Mock Tests)
Personal Income = National Income − Corporate taxes − Undistributed corporate profits − Social security contributions + Transfer payments + Interest on public debt (simplified form).
Explanation:
Government borrowing can raise interest rates (financial crowding out) and, in an open economy, appreciate the currency, thereby reducing net exports (international crowding out).
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