ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Mandatory spending, also known as direct spending, is mandated by existing laws. This type of spending includes funding for entitlement programs like Medicare and Social Security and other payments to people, businesses, and state and local governments.

Detailed explanation-2: -Direct spending is more commonly called mandatory spending. Mandatory spending is controlled by permanent laws. Medicare and medicaid payments, unemployment insurance benefits, and farm price supports are examples of mandatory spending, because payments for those purposes are authorized in permanent laws.

Detailed explanation-3: -"Discretionary” means that the money will have to be approved by Congress as part of the annual appropriations process, while “mandatory” means the spending is automatic.

Detailed explanation-4: -The three types of budgets are a surplus budget, a balanced budget, and a deficit budget. The state budget is a financial document including income and expenditure for the year. An income-and expense-based spending plan is referred to as a budget.