Question

Which type of income, disposable or discretionary, is more important to businesses that sell expensive watches, second homes, and financial services?

Answer 1

Disposable income

Step-by-step explanation:

Discretionary income is the total income available to a household (single person or household) after paying taxes. This is the money that the household has available for spending on utilities, for saving, and for investing.

Disposable income is the income available to a household after paying for essential things like food or utilities. Disposable income can therefore be used for buying goods that are not considered essential, like an expensive watch, or a second home. This is why for businesses selling this type of goods, disposable income is more important than discretionary income.