Final answer:
Residual income is decreased by higher taxes, lower income, and increased interest rates, impacting disposable income.
Step-by-step explanation:
Three key factors that can decrease residual income are a rise in taxes, a fall in income, and a rise in interest rates. An increase in taxes can reduce the net income of individuals and businesses, leaving less money to be considered as residual income. A decrease in overall income naturally lowers the amount of money available after core expenses are met. Lastly, higher interest rates can increase debt service costs, reducing the disposable income that could contribute to residual income.
The three key factors that decrease residual income are a rise in taxes, a fall in income, and a rise in interest rates.When taxes increase, it reduces the amount of income left over for residual income. Similarly, a decrease in income means there is less money available for residual income. Additionally, an increase in interest rates means higher borrowing costs, which can eat into residual income.