The income that is left after taxes for a family to make payments on necessities is called
A. gross profit
B. disposable income
C. net profit
D. discretionary income
E. family income
Answer: (B) Disposable income is the income left after paying taxes, which is used to make necessary expenditures such as housing and car payments. (A) refers to business transactions and is the money left over, for a business, to cover the expenses associated with running that business (i.e., sales expenses and operating expenses) and is incorrect. (C) is also incorrect. Net profit is what a company has earned from their operations during a specified time period. Discretionary income (D) is that income left over after taxes and after payments for necessities, so it is incorrect. Family income (E) is money that the family, or household, earns and is incorrect.