Learner's spot

The sum total of factor incomes and non-factor incomes (transfer income) is called disposable income in one year. Disposable income, also known as disposable personal income (DPI) , is the amount of money that households have available for spending and saving after income taxes have been accounted for. Disposable personal income is often monitored as one of the many key economic indicators used to gauge the overall state of the economy. * DPI=Personal Income−Personal Income Taxe s *Net Disposable Income = National Consumption Expenditure + National Savings Gross Net Disposable Income (GNDI): It is the sum of factor and non-factor incomes gross of consumption of fixed capital occurring to the residents of a country. *GNDI = GNP MP + Net current transfers from abroad. Net National Disposable Income (NNDI): It is the sum of factor and non-transfer incomes net of consumption of fixed capital occurring to the residents of a country. *NNDI = NNP MP + Net current transfers

   Difference between Access demand (AD>AS) and Deficient demand (AD<AS): S.No. Access demand (AD>AS) Deficient demand (AD<AS) 1 It refers to the situation where AD is more than AS correspondingly to full employment level of output in an economy. It refers to the situation where AD is less than AS correspondingly to full employment level of output in an economy. 2 It causes inflationary gap. It causes deflationary gap. 3 Inflationary gap refers to a state in which actual AD exceeds the required AD to establish full employment equilibrium. Deflationary gap refers to a state in which actual AD falls short to the required AD to establish full employment equilibrium. 4 It happens because of increase in investment expenditure. It happens because of decrease in investment expenditure. Access demand curve: In the above diagram, output is measured on x-axis