Question

if 54% of a persons budget is dedicated to fixed expenses like rent and loan payments, what impact does this have on the ability to adjust the budget when unexpected expenses arise? it limits flexibility because most of the budget is already committed. it has no impact on budget flexibility. it guarantees money will be left over for savings. it makes it easier to adjust the budget.

Explanation:

Fixed expenses are committed and not easily adjustable. If 54% of the budget is fixed, less money is available for unexpected expenses. This reduces the ability to re - allocate funds (budget flexibility). Options about no impact, guaranteed savings left, or easier adjustment are incorrect as fixed expenses take up a large portion.

Answer:

It limits flexibility because most of the budget is already committed.