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PERSONAL INCOME AND DISPOSABLE INCOME: Personal income (PI) is the total income received by the members of the domestic household sector, which may or may not be earned from productive activities during a given period of time, usually one year. Disposable income (DI) is the total income that can be used by the household sector for either consumption or saving during a given period of time, usually one year. Disposable income is after-tax income that is officially calculated as the difference between personal income and personal tax and nontax payments. In the numbers game, personal tax and nontax payments are about 15% of personal income, which makes disposable personal income about 85% of personal income.
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DEPOSIT EXPANSION MULTIPLIER The ratio of the change in checkable deposits to the change in reserves, which indicates the magnified change in deposits resulting from a change in reserves. The deposit expansion multiplier indicates how many checkable deposits are created with an injection of additional reserves into the banking system. As the name suggests, the change in checkable deposits is typically a multiple of the initial change in reserves. The size of the deposit expansion multiplier depends on the reserve requirement ratio. The deposit expansion multiplier also forms the core of the money multiplier.
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Francis Bacon (1561-1626), a champion of the scientific method, died when he caught a severe cold while attempting to preserve a chicken by filling it with snow.
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"Just as iron rusts from disuse, even so does inaction spoil the intellect. " -- Leonardo da Vinci, architect, artist
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RJE
RAND Journal of Economics
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