ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Discretionary income is the amount of money earned that is available for an individual to spend, save, or invest, after paying for all their necessities. This is money that can be spent as the user chooses, on vacations, luxury goods, or other non-essential goods or services.

Detailed explanation-2: -Discretionary income is money left over after a person pays their taxes and essential goods and services like housing and food. Nonessential items like vacations and luxury goods are usually paid for with funds from discretionary income.

Detailed explanation-3: -Expenses are divided into several categories, namely non-discretionary and discretionary. While non-discretionary expenses are considered mandatory-housing, taxes, debt, and groceries-discretionary expenses are any costs incurred above and beyond what is deemed necessary.

Detailed explanation-4: -Non-discretionary income is used to pay for necessities such as rent, loans, clothing, food, bill payments, goods and services, and other typical expenses.

Detailed explanation-5: -Nondefense discretionary spending funds an array of federal activities in areas such as education, transportation, income security, veterans’ health care, and homeland security. Over the past four decades, spending in that category has generally ranged from about 3 percent to 4 percent of GDP.