ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Discretionary spending is an important part of a healthy economy. People only spend money on things like travel, movies, and consumer electronics if they have the funds to do so. Some people use credit cards to purchase discretionary goods, but increasing personal debt is not the same as having a discretionary income.

Detailed explanation-2: -Discretionary expenses: These are personal expenses where you have more control over what and how much to spend. This category can include things like trips to the coffee shop, going to the movies, and dining out at restaurants with friends.

Detailed explanation-3: -Some expenses, such as vacation costs and luxury items, are not necessary to maintain a household and, thus, are classified as discretionary expenses. In other words, the income-earner can pay for these goods or services at their own discretion.

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, mortgage payments and utilities are nondiscretionary expenses. You have to pay those.