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Disposable Income Revisited

Disposable income is whatever income you have left after paying your taxes and receiving government transfers; that part of your income you are able to spend or save as you seem fit. Based on the size of the part of your income that you’re willing to spend or to save (propensity to save/consume) you affect the aggregate consumption in your country and, through investment, the size of your GDP, in the long run.

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