ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Discretionary expenses are often defined as nonessential spending. This means a business or household is still able to maintain itself even if all discretionary consumer spending stops. Meals at restaurants and entertainment costs are examples of discretionary expenses.

Detailed explanation-2: -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-3: -Discretionary expenses are costs that are not central to your business’ survival. They are also called non-essential expenses or non-essential spending. However, do not confuse non-essential for unnecessary or unimportant.

Detailed explanation-4: -A discretionary expense is voluntary spending. You want to buy something, but it isn’t mandatory. Entertainment and recreational purchases fall into this category. On the other hand, bills such as rent, home loan payments and utilities are nondiscretionary expenses.