Answer:
The correct equation is
*income – income tax = disposable income
Explanation:
Disposable income shows the income that can be used for personal uses after the mandatory income taxes are paid to the government.
Disposable income is an important concept in economics as it allows to reasonably deduce how the income taxes has to be adjusted and how the taxes will effect the consumption and savings by the individuals.
More disposable income for individuals generally means that person may have a higher standard of living. But if most of that income is spent on consumption rather than savings and investing, then the economy loses its advantage.
