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Disposable income is the money a consumer has left after paying taxes to use for necesities such as food housing, clothing, and transportation. Discretionary income is the money that remains after paying for taxes and necessities and is used for luxury items.

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Q: What is the difference between a consumer's disposable and discretionary income?
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What is the difference between disposable income and discretionary income?

Formulas are: Disposable income = consumption expenditure + savings - support of others; Discretionary income = Gross income - taxes - necessities. Although denotatively wrong, disposable income is commonly used to denote discretionary income.


What is the between disposable income and discretionary income?

Formulas are: Disposable income = consumption expenditure + savings - support of others; Discretionary income = Gross income - taxes - necessities. Although denotatively wrong, disposable income is commonly used to denote discretionary income.


What is the different between disposable income and discretionary income?

Formulas are: Disposable income = consumption expenditure + savings - support of others; Discretionary income = Gross income - taxes - necessities. Although denotatively wrong, disposable income is commonly used to denote discretionary income.


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Discretionary fiscal policy requires deliberate government action. Automatic fiscal policy occurs automatically without (additional) congressional action.


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