ECONOMICS (CBSE/UGC NET)

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ECONOMICS

BUDGETING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Daycare can be very expensive! My friend pays $972 every month for her 3 year old daughter.This is considered a ____
A
Fixed Expense
B
Variable Expense
C
Discretionary Expense
D
Income
Explanation: 

Detailed explanation-1: -Fixed expenses generally cost the same amount each month (such as rent, mortgage payments, or car payments), while variable expenses change from month to month (dining out, medical expenses, groceries, or anything you buy from a store).

Detailed explanation-2: -Variable costs that can change from month to month, such as entertainment, groceries, and clothing, should take up 30% of your income. Savings should take up 20% of your income.

Detailed explanation-3: -Wages paid to workers however can vary as the number of workers increase or decrease. Hence it is not considered as a fixed cost.

Detailed explanation-4: -Fixed expenses 50% These unchanging costs should stay within 50% of your monthly income. Choose housing, transportation, and monthly subscriptions you can afford to sustain without draining your wallet.

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