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SSC CGL 2022 PYQ — Question 44

SSC CGL - 03 Dec 2022 - Shift 2 • General Awareness • Q44

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What component is included in the national income to derive the personal income of households?

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Correct answer: B

Explanation

The correct answer is Option 2 i.e. Transfer payments from government and firms.

  • National income encompasses payments transferred from the government and firms to households, constituting personal income.

  • Personal Income (PI) is computed as Undistributed Profits (Y) minus net interest payments made by households, adjusted by corporate tax and augmented by transfer payments to households from both the government and firms.

  • National income represents the total value of goods and services produced by a nation within a fiscal year.

  • Personal income reflects the actual earnings of individuals, computed by deducting corporate taxes and social security payments, and adding government and business transfer payments along with net government interest payments.