discretionary

(adjective)

Available at one's discretion; able to be used as one chooses; left to or regulated by one's own discretion or judgment.

Related Terms

  • lease

Examples of discretionary in the following topics:

  • Arguments For and Against Discretionary Monetary Policy

    • Discretionary policies refer to subjective actions taken in response to changes in the economy.
    • For much of the 20th century, governments adopted discretionary policies to correct the business cycle.
    • A discretionary policy is supported because it allows policymakers to respond quickly to events.
    • This can create compounding issues related to the discretionary policy enacted.
    • A compromise between strict discretionary and strict rule-based policy is to grant discretionary power to an independent body.
  • Automatic Stabilizers Versus Discretionary Policy

    • Automatic stabilizers and discretionary policy differ in terms of timing of implementation and what each approach sets out to achieve.
    • In practice, most policy changes are discretionary in nature.
    • With discretionary policy there is a significant time lag.
    • Discretionary policies can target other, specific areas of the economy.
    • Discretionary policies can address failings of the economy that are not strictly tied to aggregate demand.
  • Difficulty in Getting the Timing Right

    • Discretionary fiscal policy relies on getting the timing right, but this can be difficult to determine at the time decisions must be made.
    • A nation can respond to economic fluctuations through automatic stabilizers or through discretionary policy.
    • With discretionary fiscal policy, timing plays a very significant role.
    • Discretionary policy often requires that a set of laws must be passed through a legislature.
    • Once the discretionary program is in place, the next step is to measure its effectiveness.
  • The Goals of Economic Policy

    • For much of the 20th century, governments adopted discretionary policies such as demand management that were designed to correct the business cycle.
    • A discretionary policy is supported because it allows policymakers to respond quickly to events.
    • However, discretionary policy can be subject to dynamic inconsistency: a government may say it intends to raise interest rates indefinitely to bring inflation under control, but then relax its stance later.
    • A compromise between strict discretionary and strict rule-based policy is to grant discretionary power to an independent body.
    • Another type of non-discretionary policy is a set of policies which are imposed by an international body.
  • Disposable Income

    • Discretionary income is disposable income minus all payments that are necessary to meet current bills.
    • Discretionary income = Gross income - taxes - all compelled payments (bills)
    • Disposable income is often incorrectly used to denote discretionary income.
  • Fringe Benefits

    • Fringe benefits are various indirect benefits, often of a more discretionary nature than standard benefits.
    • The term perks (also perqs) is often used colloquially to refer to those benefits of a more discretionary nature.
  • Arguments For and Against Fighting Recession with Expansionary Monetary Policy

    • Monetary policy uses a variety of discretionary tools to control one or both of these to influence outcomes like economic growth, inflation, exchange rates with other currencies, and unemployment.
    • Assess the value of discretionary expansionary monetary policy and the associated shortcomings.
  • Fixed Costs

    • Discretionary fixed costs usually arise from annual decisions by management to spend on certain fixed cost items.
    • Examples of discretionary costs are advertising, machine maintenance, and research and development expenditures.
  • Other Considerations in Capital Budgeting

    • The notion of real options was developed from the idea that one can view firms' discretionary investment opportunities as a call option on real assets, in much the same way as a financial call option provides decision rights on financial assets.
    • Such future discretionary investment opportunities are known as growth options.
  • The Budgeting Process

    • Major categories of FY 2012 spending included: Medicare & Medicaid ($802B or 23% of spending), Social Security ($768B or 22%), Defense Department ($670B or 19%), non-defense discretionary ($615B or 17%), other mandatory ($461B or 13%) and interest ($223B or 6%).
    • Non-defense discretionary spending is used to fund the executive departments (e.g., the Department of Education) and independent agencies (e.g., the Environmental Protection Agency), although these do receive a smaller amount of mandatory funding as well.
    • Discretionary budget authority is established annually by Congress, as opposed to mandatory spending that is required by laws that span multiple years, such as Social Security or Medicare.
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