13. How is the disposable income calculated from personal income? 14. Distinguish between disposable income and discretionary income.

Economics Allocation of Possible Income You are given different amounts of money on which to live (roughly approximating different Malaysian income groups). You are required to allocate funds to the categories of housing, food, clothing, education, health, transportation, recreation, etc. – other categories may be added by you. Different income groups are asked to critique the allocation of different groups - is it reasonable, why do you say so and how could it be allocated better. T20 income RM15,000 M40 income RM8,000 B40 income RM3000

6. Study Questions and Problems #6 True or False: As measured by the government, free health care, free public housing, day care, and job training for the poor will not reduce the poverty rate. True, because all of these measures increase disposable income. O True, because all of these measures are in-kind transfers. False, because all of these measures directly increase cash income. False, because none of these measures are in-kind transfers.

Ratio of change in savings due to the change in income is known as _______