Google
Tuesday 
August 14, 2018 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
ABSOLUTE POVERTY: The amount of income a person or family needs to purchase an absolute amount of the basic necessities of life. These basic necessities are identified in terms of calories of food, BTUs of energy, square feet of living space, etc. The problem with the absolute poverty level is that there really are no absolutes when in comes to consuming goods. You can consume a given poverty level of calories eating relatively expensive steak, relatively inexpensive pasta, or garbage from a restaurant dumpster. The income needed to acquire each of these calorie "minimums" vary greatly. That's why some prefer relative poverty.

Visit the GLOSS*arama


DISPOSABLE INCOME AND PERSONAL INCOME:

Disposable income (DI) is the total income that can be used by the household sector for either consumption or saving during a given period of time, usually one year. Personal income (PI) is the total income received by the members of the domestic household sector, which may or may not be earned from productive activities during a given period of time, usually one year. Disposable income is after-tax income that is officially calculated as the difference between personal income and personal tax and nontax payments. In the numbers game, personal tax and nontax payments are about 15 percent of personal income, which makes disposable personal income about 85 percent of personal income.
The derivation of disposable income (DI) from personal income (PI) by subtracting personal taxes (PT) is illustrated in this equation:
DI=PI - PT
A reasonable question might arise: "Of what use is disposable income in the study of the macroeconomy?" After all, national income measures the total income EARNED by factors of production and personal income measures the total income RECEIVED by the household sector. What more is needed?

Disposable income provides useful information about the amount of income received by the household sector that is actually available for spending. The key is that a portion of personal income is gobbled up by income taxes. While the household sector officially receives personal income, the government sector is primed and ready to extract a portion of this personal income in income taxes.

<= DISPOSABLE INCOMEDISSAVING =>


Recommended Citation:

DISPOSABLE INCOME AND PERSONAL INCOME, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2018. [Accessed: August 14, 2018].


Check Out These Related Terms...

     | personal taxes | consumption expenditures | saving | gross domestic income | national income | net domestic product | personal tax and nontax payments | factor payments | transfer payments | income earned but not received | income received but not earned | corporate profits distribution |


Or For A Little Background...

     | disposable income | personal income | gross domestic product | gross domestic product, income | production | resource markets | National Income and Product Accounts | Bureau of Economic Analysis | National Bureau of Economic Research |


And For Further Study...

     | business cycles | circular flow | gross domestic product, expenditures | gross domestic product, ins and outs | gross domestic product, welfare | gross national product | real gross domestic product | national income and gross domestic product | national income and net domestic product | personal income and national income |


Related Websites (Will Open in New Window)...

     | Bureau of Economic Analysis |


Search Again?

Back to the WEB*pedia


APLS

PURPLE SMARPHIN
[What's This?]

Today, you are likely to spend a great deal of time at a garage sale hoping to buy either a T-shirt commemorating next Thursday or a birthday gift for your uncle. Be on the lookout for slightly overweight pizza delivery guys.
Your Complete Scope

This isn't me! What am I?

A communal society, a prime component of Karl Marx's communist philosophy, was advocated by the Greek philosophy Plato.
"And while the law of competition may be sometimes hard for the individual, it is best for the race, because it ensures the survival of the fittest in every department. "

-- Andrew Carnegie, entrepreneur

JEL
Journal of Economic Literature
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2018 AmosWEB*LLC
Send comments or questions to: WebMaster