The difference between Private Income and Personal Income is ..(a) Corporate tax(b) Dividend(c) Corporate savings(d) Corporate tax and corporate savings
Question
The difference between Private Income and Personal Income is ..(a) Corporate tax(b) Dividend(c) Corporate savings(d) Corporate tax and corporate savings
Solution
The difference between Private Income and Personal Income is (d) Corporate tax and corporate savings.
Here's why:
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Private Income: This is the total of all incomes received by the private sector of a country. It includes income from domestic sources, rest of the world, and the government. It also includes corporate profits and savings.
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Personal Income: This is the total income received by the individuals of a country. It includes income like wages, salaries, interest, dividends, etc. However, it does not include corporate taxes or corporate savings.
Therefore, the difference between Private Income and Personal Income is Corporate tax and Corporate savings. These are included in Private Income but not in Personal Income.
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