| 1. Personal income is that income which is actually obtained by nationals. |
| 2. Personal Income = National income - undistributed profits of corporation - payments for social security provisions - corporate tax + government transfer payments + Business transfer payments + Net interest paid by government. |
A) 1 only
B) 2 only
C) 1 and 2
D) Neither 1 nor 2
Correct Answer: C
Solution :
Personal income is a flow concept. It is the income that is obtained by nationals. Personal income is obtained by subtracting corporate taxes and payments made for social security?s provision from national income and adding to it government transfer payments, business transfer payments and net interest paid by the government.
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