Why net transfer payment from government are canceled in national disposable income??
Dear student National Disposable Income (NDI) is that portion of National Income that is available to the all the normal residents of a country for consumption and savings. NDI includes both factor incomes and current transfers. That is, besides factor incomes, some part of income is received in the form of transfer payments (i.e. income received but not in return for factor services) such as, scholarships, pensions, etc. Transfer payments add to the income of a person, thereby, are added to the National Income to arrive at an estimate of National Disposable Income. National Disposable Income = National Income + Net Indirect Taxes + Net Transfer Payments from Rest of the World (ROW) Regards