AnswersAISD Economics 2026-27The Business Cycle

Budgeting Answers

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1
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Why is net income lower than gross income?

A
fixed spending
B
budgets
C
withholdings
D
discretionary spending
2
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Mindy wants to save money to buy a new couch.Which would be the best strategy for her to accomplish her goal?

A
adopt a dog from a shelter
B
stop paying her credit card bill
C
decrease the budget for basic food needs
D
forgo watching movies online or in the theater
3

Kerry knows that a new car is in her future.Which would be the best strategy to help her accomplish this goal?

A
contribute to a savings account
B
give up paying for health insurance
C
stop paying the full amount of rent
D
apply for and open a new credit card
4

Leo’s car broke down, and he must find money in his limited budget to pay the repair bill.Which of the following is the best solution for Leo to handle the unplanned spending?

A
Leo forgoes going out to dinner.
B
Leo forgoes paying the rent on his apartment.
C
Leo forgoes paying his water bill.
D
Leo forgoes paying his electricity bill.
5

Which is an example of an income deduction?

A
an unexpected salary cut
B
wages lost due to illness
C
vacation budget
D
retirement savings
6

What type of expense is an example of the cost to drive to and from work?

A
a variable expense.
B
a fixed expense.
C
a short-term expense.
D
a discretionary expense.
7

Look at this monthly budget.Monthly Budget

Question illustration
A
Add to fixed expenses.
B
Decrease food expenses.
C
Reduce rent payments.
D
Increase total income.
8

What is most likely the reason variable expenses should be planned after fixed expenses?

A
Fixed expenses are deducted from gross income, and variable expenses come from net income.
B
Variable expenses are a necessary part of fixed expenses but can only be calculated after fixed expenses.
C
Variable expenses are almost always higher than fixed expenses and need a greater budget.
D
Fixed expenses are required and constant, but variable expenses are more flexible.
9

To change gross income, someone would need to

A
save more per month.
B
reduce deductions.
C
earn more money.
D
increase withholdings.
10

When should fixed and variable monthly budgeted expenses first be planned?

A
at the end of each month
B
day by day during the month
C
at the start of each month
D
at least twice per month

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Budgeting Answers — AISD Economics 2026-27