Question

Suppose that there are 2 million inhabitants of a country in which 1 the mean gross (before tax) income is $20,000 per year. Suppose that the mean individual pays taxes on $3000 per year. What is the total disposable income (gross income minus taxes) per year for the country as a whole?

Answer 1

$34 billion

Explanation:

Data provided in the question:

Total number of inhabitants of a country = 2 million

1 mean gross income = $20,000 per year

Tax paid by mean individual = $3000 per year

Now,

Mean disposable income

= Mean gross income - Mean tax

= $20,000 - $3,000

= $17,000 per year

Therefore,

Total disposable income per year

= Mean disposable income × Total number of inhabitants of a country

= $17,000 × 2 million

= $34 billion