They can either spend it (consumption) or they can put it into their bank account (saving)
a
to the level of disposible income
the fraction of total disposable income that households spend on consumption
Disposable income refers to the amount of money individuals or households have left after taxes and necessary expenses, such as housing and food, are deducted from their total income. It represents the funds available for discretionary spending, savings, or investing. Essentially, it's the money people can use freely to enhance their quality of life or fulfill personal desires.
disposable personal income
Personal Income = Disposable Income + Personal Savings
Discretionary income, not personal income or disposable income, would be the greatest interest to marketers.
To calculate disposable personal income, you take personal income and subtract personal taxes. Disposable personal income represents the amount of money individuals have available for spending and saving after accounting for taxes. It reflects the income that can be used for consumption or saved for future use.
a
to the level of disposible income
individual income taxes
the fraction of total disposable income that households spend on consumption
Disposable income refers to the amount of money individuals or households have left after taxes and necessary expenses, such as housing and food, are deducted from their total income. It represents the funds available for discretionary spending, savings, or investing. Essentially, it's the money people can use freely to enhance their quality of life or fulfill personal desires.
disposable personal income
disposable personal income
disposable personal income
a direct relationship.