Final answer:
Discretionary income is the money left over after all expenses are paid. It can affect the demand for certain items as people are more likely to spend money on non-essential goods when they have more discretionary income.
Step-by-step explanation:
Money is what people in a society regularly use when purchasing or selling goods and services. When everything is paid for and there is money left over, it is called discretionary income. Discretionary income is the amount of money a person has left after paying bills and expenses. This extra money can be used to invest, save, or spend on non-essential items.
The availability of discretionary income can affect the demand for certain items. When people have more discretionary income, they are more likely to spend money on luxury items, vacations, and non-essential goods. Conversely, when discretionary income is low, people tend to prioritize essential items and may cut back on discretionary spending. Therefore, the level of discretionary income plays a role in determining the demand for certain items.