Economics Today and Tomorrow, Student Edition
Economics Today and Tomorrow, Student Edition
1st Edition
ISBN: 9780078747663
Author: McGraw-Hill
Publisher: Glencoe/McGraw-Hill School Pub Co
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Chapter 3, Problem 10AA
To determine

To state: The difference between disposable income and discretionary income.

Expert Solution & Answer
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Explanation of Solution

Disposable income is defined as the income that a person is left with after paying all the taxes. Disposable income is a part of income that is available to spend.

On the contrary, discretionary income is the income that is left to spend on extras like luxury items or saving or entertainment after buying the necessities like food, clothing and shelter.

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