Question

Based on her spending in the previous month, Ashley needs to cut $500 per month from her budget. Look at Ashley's budget and decide what she should cut, and explain why there is room for her to cut her budget in that way. Governments have to go through the same process in balancing budgets, though of course on a much larger scale. Item Rent Groceries for meals Snacks Personal grooming Dining out Amount Budget Amount Reason she can make cuts: $800 item $250 S75 S50 S150 S125 $140 $220 Credit card payments $60 $180 $40 S95 S40 Premium cable$120 Streaming movies $25 Gasoline Car insurance Car payment (10 points) Make sure your Amount column totals $500 Utilities Internet Cell phone Landline phone Questions to answer: (5 points each) 1. How does Ashley's spending patterns connect with the larger economy? Movies (2X a montb$50 | $ io0 Tanning salon$20 2. What items are probably the least likely for Ashley to make budget cuts in the short term? Concert (IX a month) Giym membership Savings S20 $250

Answer 1

Item	Amount	Reason
Dining out	150	She can reduce her expenses on this by eating food in home. It is doscrediscret expense which can be avoided
Concert	100	It is a discretionary expense which can be avoided. She need not go to concert every month
Landline phone	40	she is using monilm phone so need of land line
Movies	50	As she is spending money for streaming movie she can watch them there rather than spending on halls. It is a discretionary expense
Snacks	75	Discretionary expense which can be avoided

Rent	800	She can reduce her rent by moving to some place cheaper.
Personal grooming	50	Discretionary expense

1) One person spending pattern shows his income level and his social economic condition. Consumer spending on goods and services shows the economic health of a country. The more people are consuming it means people are earning more money which means the unemployment rate is decreasing and also the economy is booming. It also tells the standard of lvinli in a country.

2) Cell phone, car insurance , grocery gasoline , utilities these are the least likely to get a budget cuts as there are non discretionary expense which cannot be avoided by her as she has to use them to survive for a day to day living.