Question 45
HardOriginal questionWhich item is ADDED to national income to arrive at personal income?
Show the answer and explanation
CorrectNot quiteAnswer C
Correct answer: C
Explanation
Personal income = NI − undistributed profits − corporate tax − net interest paid by households + transfer payments to households.
Transfers are received by households though they are not factor income, so they are added.
Worth noting
Corporate tax and undistributed profit are part of national income but never reach households, so they are subtracted.
- Concept
- From national income to personal income
- Typical timeTypical
- 100 s
- Your timeYours
- —
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