What are some examples of mandatory and discretionary spending?

What are some examples of mandatory and discretionary spending?

For example, the administrative expenses associated with running the Social Security Administration generally are funded with discretionary spending, but the benefit checks sent to retirees and disability recipients enrolled in Social Security programs are classified as mandatory spending.

What are examples of mandatory spending?

Outlays for the nation’s three largest entitlement programs (Social Security, Medicare, and Medicaid) and for many smaller programs (unemployment compensation, retirement programs for federal employees, student loans, and deposit insurance, for example) are mandatory spending.

What are examples of discretionary spending?

Some examples of areas funded by discretionary spending are national defense, foreign aid, education and transportation.

What are 4 examples of discretionary spending?

There’s no better way to really spell out what’s considered a discretionary expense than with a nice long list….Investments

• Mergers and acquisitions.
• Real estate.
• Stocks.
• Research and development.

What is an example of mandatory spending quizlet?

Mandatory spending (also called non-discretionary spending) is authorized by permanent law. An example is Social Security. This tax category includes Social Security taxes, Medicare taxes, unemployment insurance taxes, and federal employee retirement payments.

What are the two biggest things that are considered mandatory spending?

Social Security, Medicare, and Medicaid were the largest individual mandatory expenditures, together accounting for about 78 percent of all mandatory spending. Social Security, Medicare, and Medicaid make up nearly 50 percent of all federal spending.

What is considered discretionary spending?

A discretionary expense is a cost that a business or household can survive without, if necessary. Discretionary expenses are often defined as nonessential spending. Meals at restaurants and entertainment costs are examples of discretionary expenses.

Why is discretionary spending important?

Discretionary income is an important marker of economic health. Economists use it, along with disposable income, to derive other important economic ratios, such as the marginal propensity to consume (MPC), marginal propensity to save (MPS), and consumer leverage ratios.

What is mandatory spending give an example quizlet?

Mandatory spending (also called non-discretionary spending) is authorized by permanent law. An example is Social Security. The President and Congress can change the law to change the level of spending on mandatory programs—but they don’t have to do so.

Why is mandatory spending important?

Mandatory spending plays a major role in larger fiscal trends. During economic downturns, government revenues fall and expenditures rise as more people become eligible for mandatory programs such as unemployment insurance and income security programs, causing deficits to increase or surpluses to shrink.

What is mandatory spending quizlet?

Mandatory spending is defined as those areas of the federal budget that must be enacted each year by law and are not dependent on annual review by committees of congress.

Which is an example of discretionary?

The definition of discretionary is something that you use as desired or needed. When you have petty cash available to you to use, the money you spend is an example of discretionary spending. Left to or regulated by one’s own discretion or judgment.

What are 2 examples of discretionary spending?

This spending is an optional part of fiscal policy, in contrast to entitlement programs for which funding is mandatory and determined by the number of eligible recipients. Some examples of areas funded by discretionary spending are national defense, foreign aid, education and transportation .

What programs are defined as mandatory spending obligations?

Mandatory spending refers to spending enacted by law. Generally, a mandatory spending consists of entitlement programs. For example, Social Security benefits, and Medicare.

What are some examples of discretionary spending in government?

Some examples of areas funded by discretionary spending are national defense, foreign aid, education and transportation . In the United States, discretionary spending refers to optional spending set by appropriation levels each year, at the discretion of Congress.

What benefits is an example of discretionary spending?

Discretionary benefits are employment benefits that are not mandated by law. They can include a range of employee benefits, such as health insurance, sick leave, maternity leave, vacation leave, pension plans, life insurance, and prescription drug insurance .