ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A discretionary expense is a non-essential expense that is incurred by an individual, household, or business. Another way to think of discretionary expenses is to classify them as “wants” instead of “needs.” A common example is when an individual purchases a new smartphone whenever the latest edition comes out.

Detailed explanation-2: -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. These are generally considered wants, while non-discretionary expenses are usually referred to as needs.

Detailed explanation-3: -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.

Detailed explanation-4: -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.

Detailed explanation-5: -Taxes. Employee salaries. Debts repayments (including loans and mortgages) Rent. Utility bills (including Internet costs) Inventory (especially for retail and other businesses that sell physical goods) Software that directly powers your business. More items •27-Jun-2022