Final answer:
When the government cuts personal pay, it reduces both take-home pay and disposable income.
Step-by-step explanation:
When the government cuts personal pay, it affects both take-home pay and disposable income. Take-home pay refers to the amount of money an individual receives in their paycheck after deductions, such as taxes. When personal pay is cut, take-home pay decreases because less money is being earned.
Disposable income, on the other hand, is the amount of money an individual has available for spending and saving after taxes and other deductions. When personal pay is cut, disposable income also decreases because the amount of money available for spending and saving is reduced.