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Which of the following are correctly matched?
1. Nominal income - the wage someone gets in hand per day or per month
2. Real income - nominal income minus the present-day rate of inflation
3. Disposable income - the net part of wage one is free to use which is derived after deducting the Direct taxes from the real/nominal income
Choose from the following options.
- a)1 and 2 Only
- b)2 and 3 Only
- c)1 and 3 Only
- d)All of them
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
Which of the following are correctly matched?1. Nominal income - the w...
- The income of a person has three forms—the first form is nominal income (the wage someone gets in hand per day or per month).
- The second form is real income (this is nominal income minus the present-day rate of inflation-adjusted in percentage form), and
- The last one is the disposable income (the net part of wage one is free to use which is derived after deducting the direct taxes from the real/nominal income, depending upon the need of data).
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Which of the following are correctly matched?1. Nominal income - the w...
Explanation:
Nominal Income:
Nominal income refers to the amount of money an individual earns in a given period, such as a day or a month. It is the face value of income received before adjusting for any changes in prices or inflation. Nominal income does not account for changes in purchasing power over time. For example, if someone earns $1000 per month, that is their nominal income.
Real Income:
Real income, on the other hand, takes into account the effect of inflation on purchasing power. It is calculated by adjusting nominal income for changes in the general price level. Real income measures the actual purchasing power of an individual's income. For example, if the inflation rate is 3% and someone's nominal income is $1000, their real income would be $970 (adjusted for inflation).
Disposable Income:
Disposable income refers to the amount of money an individual has available to spend or save after deducting taxes from their income. It is the net income that can be used for consumption or savings. Disposable income takes into account direct taxes, such as income tax or property tax, which are deducted from an individual's real or nominal income.
Correct Matches:
From the given options, all three matches are correct:
1. Nominal income - the wage someone gets in hand per day or per month: This is the correct definition of nominal income. It refers to the actual wage or income someone receives without considering changes in purchasing power.
2. Real income - nominal income minus the present-day rate of inflation: This is the correct definition of real income. It takes into account the effect of inflation on purchasing power by adjusting nominal income.
3. Disposable income - the net part of wage one is free to use which is derived after deducting the Direct taxes from the real/nominal income: This is the correct definition of disposable income. It considers the deductions of direct taxes from real or nominal income to determine the net income available for spending or saving.
Therefore, the correct answer is option 'D' - All of them.
Nominal Income:
Nominal income refers to the amount of money an individual earns in a given period, such as a day or a month. It is the face value of income received before adjusting for any changes in prices or inflation. Nominal income does not account for changes in purchasing power over time. For example, if someone earns $1000 per month, that is their nominal income.
Real Income:
Real income, on the other hand, takes into account the effect of inflation on purchasing power. It is calculated by adjusting nominal income for changes in the general price level. Real income measures the actual purchasing power of an individual's income. For example, if the inflation rate is 3% and someone's nominal income is $1000, their real income would be $970 (adjusted for inflation).
Disposable Income:
Disposable income refers to the amount of money an individual has available to spend or save after deducting taxes from their income. It is the net income that can be used for consumption or savings. Disposable income takes into account direct taxes, such as income tax or property tax, which are deducted from an individual's real or nominal income.
Correct Matches:
From the given options, all three matches are correct:
1. Nominal income - the wage someone gets in hand per day or per month: This is the correct definition of nominal income. It refers to the actual wage or income someone receives without considering changes in purchasing power.
2. Real income - nominal income minus the present-day rate of inflation: This is the correct definition of real income. It takes into account the effect of inflation on purchasing power by adjusting nominal income.
3. Disposable income - the net part of wage one is free to use which is derived after deducting the Direct taxes from the real/nominal income: This is the correct definition of disposable income. It considers the deductions of direct taxes from real or nominal income to determine the net income available for spending or saving.
Therefore, the correct answer is option 'D' - All of them.
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Which of the following are correctly matched?1. Nominal income - the wage someone gets in hand per day or per month2. Real income - nominal income minus the present-day rate of inflation3. Disposable income - the net part of wage one is free to use which is derived after deducting the Direct taxesfrom the real/nominal incomeChoose from the following options.a)1 and 2 Onlyb)2 and 3 Onlyc)1 and 3 Onlyd)All of themCorrect answer is option 'D'. Can you explain this answer?
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Which of the following are correctly matched?1. Nominal income - the wage someone gets in hand per day or per month2. Real income - nominal income minus the present-day rate of inflation3. Disposable income - the net part of wage one is free to use which is derived after deducting the Direct taxesfrom the real/nominal incomeChoose from the following options.a)1 and 2 Onlyb)2 and 3 Onlyc)1 and 3 Onlyd)All of themCorrect answer is option 'D'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which of the following are correctly matched?1. Nominal income - the wage someone gets in hand per day or per month2. Real income - nominal income minus the present-day rate of inflation3. Disposable income - the net part of wage one is free to use which is derived after deducting the Direct taxesfrom the real/nominal incomeChoose from the following options.a)1 and 2 Onlyb)2 and 3 Onlyc)1 and 3 Onlyd)All of themCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following are correctly matched?1. Nominal income - the wage someone gets in hand per day or per month2. Real income - nominal income minus the present-day rate of inflation3. Disposable income - the net part of wage one is free to use which is derived after deducting the Direct taxesfrom the real/nominal incomeChoose from the following options.a)1 and 2 Onlyb)2 and 3 Onlyc)1 and 3 Onlyd)All of themCorrect answer is option 'D'. Can you explain this answer?.
Which of the following are correctly matched?1. Nominal income - the wage someone gets in hand per day or per month2. Real income - nominal income minus the present-day rate of inflation3. Disposable income - the net part of wage one is free to use which is derived after deducting the Direct taxesfrom the real/nominal incomeChoose from the following options.a)1 and 2 Onlyb)2 and 3 Onlyc)1 and 3 Onlyd)All of themCorrect answer is option 'D'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which of the following are correctly matched?1. Nominal income - the wage someone gets in hand per day or per month2. Real income - nominal income minus the present-day rate of inflation3. Disposable income - the net part of wage one is free to use which is derived after deducting the Direct taxesfrom the real/nominal incomeChoose from the following options.a)1 and 2 Onlyb)2 and 3 Onlyc)1 and 3 Onlyd)All of themCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following are correctly matched?1. Nominal income - the wage someone gets in hand per day or per month2. Real income - nominal income minus the present-day rate of inflation3. Disposable income - the net part of wage one is free to use which is derived after deducting the Direct taxesfrom the real/nominal incomeChoose from the following options.a)1 and 2 Onlyb)2 and 3 Onlyc)1 and 3 Onlyd)All of themCorrect answer is option 'D'. Can you explain this answer?.
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ample number of questions to practice Which of the following are correctly matched?1. Nominal income - the wage someone gets in hand per day or per month2. Real income - nominal income minus the present-day rate of inflation3. Disposable income - the net part of wage one is free to use which is derived after deducting the Direct taxesfrom the real/nominal incomeChoose from the following options.a)1 and 2 Onlyb)2 and 3 Onlyc)1 and 3 Onlyd)All of themCorrect answer is option 'D'. Can you explain this answer? tests, examples and also practice UPSC tests.
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