Which of the following best describes fixed expenses?

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Study for the WGU FINC2000 D363 Personal Finance Exam. Understand key financial concepts, prepare with flashcards and multiple choice questions, and find explanations for each question. Boost your exam readiness today!

Fixed expenses are best described as costs that remain constant from month to month. This consistency allows individuals to budget more effectively since these expenses do not fluctuate frequently. An example of a fixed expense is rent, which typically requires the same payment each month, providing predictability in financial planning.

In contrast, other options describe expenses that either fluctuate or are not regular monthly commitments. For instance, groceries can vary significantly depending on personal choices and needs, making them an example of variable expenses. Utility costs can also change based on usage, further illustrating why they don't fit the definition of fixed expenses. Lastly, costs associated with investments, such as stock purchases, can vary widely and are not regular monthly expenses, reinforcing that they do not align with the characteristics of fixed expenses.

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