Increases in discretionary income can occur as a result of all of the following except
A)an increase in gross income.
B)a decrease in taxes.
C)an increase in disposable income.
D)a decrease in housing costs.
E)an increase in interest rates.

Question

Quizplus · Accepted Answer

An increase in interest rates has no direct impact on discretionary income. Discretionary income is the amount of money left over after paying for necessary expenses like rent, taxes, and food. An increase in gross income (A) or a decrease in taxes (B) can increase disposable income and thus discretionary income. An increase in disposable income (C) means there is more money available to spend on non-essential items. A decrease in housing costs (D) can lower necessary expenses, which would increase disposable income and thus discretionary income.

Increases in Discretionary Income Can Occur as a Result of All