CA Inter EFF | Amendments Doubt | Personal Income

PLS FIND THE EXPLANATION BELOW (Can also refer to attached images for further support): 

Personal income (PI) is all income received by Americans, whether it is earned or unearned. The main difference between personal income and national income is that personal income includes transfer payments, such as private pension payments, retirement benefits, unemployment insurance benefits, veteran benefits, disability payments, welfare, and farmer subsidies. They are called transfer payments because the government takes the money from those who earn the income and gives it to the beneficiaries of the transfer payments.

Additional differences between personal income and national income includes income earned but not received, which must, therefore, be subtracted, from national income plus interest earned from government securities. The interest earned on government bonds, notes, and bills are part of personal income but not national income, because the government is not considered a resource, since it is not a factor of production. Therefore, the interest earned by lending to the government is not counted as part of national income.

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