Which of the following is true of discretionary spending, which stimulates the economy?

Question

Quizplus · Accepted Answer

Discretionary spending, which refers to spending on non-essential items, such as entertainment or vacations, can stimulate the economy when it is widely spent. When money is in the hands of the poor, working class, and middle class, it is likely to be quickly spent on goods and services, which in turn, creates demand and boosts economic activity. Therefore, option C is the correct choice. Option A is incorrect because it assumes that the wealthy will spread their money too widely, whereas in reality, they are more likely to save or invest their money. Option B is incorrect because it is a stereotype that poor and working-class individuals only spend money on irresponsible habits or illegal markets.

Which of the Following Is True of Discretionary Spending, Which