Question

Which of mina's expenses should most likely be ranked as fixed expenses?

1) groceries
2) house payment
3) discretionary spending
4) automobile insurance
5) electricity bill

Answer 1

Mina's expenses that are fixed include her house payment and automobile insurance, as these costs remain consistent month to month, unlike variable expenses such as groceries or electricity.

Step-by-step explanation:

Among Mina's expenses that should most likely be ranked as fixed expenses are the house payment (2) and automobile insurance (4). Fixed expenses are those that do not change from month to month and are obligatory payments. For example, a house payment is generally the same amount each month, as is the cost of automobile insurance which is usually contracted for a set period at a consistent rate. These are contrasted with variable expenses which can fluctuate, such as grocery bills and electricity costs, which can vary based on consumption or market prices. Discretionary spending (3) is also variable as it includes non-essential items that one can choose to spend more or less on.