Total income households have after paying taxes and receiving government transfers is called:a. disposable income. b. private savings. c. aggregate spending. d. investment. gross income.

Answer: Option A

Explanation:

The income earned by the individuals after the deduction of tax is known as the disposable income. This disposable income is the income utilized by the households to spend for their living. Disposable income is used in calculation of the economic activities in the country.

Disposable income is also used as the economic indicator in calculating the growth of the country's financial position. It is also utilized in savings for retirement or future savings. It can be calculated as follows:

DPI = Personal Earnings - Income tax paid to the government