Compare and contrast the concepts of income and wealth. Are these measured as a stock or a flow? Explain
What will be an ideal response?
Wealth, or net worth, is the total value of what an entity owns minus what it owes. It is a stock measure because wealth is measured at a given point in time. Income is the sum of all wages, salaries, profits, interest and other forms of earnings for an entity over a given period of time. Because it is measured over a period of time, it is a flow measure.
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Over the range of most of a firm’s output, average revenue is greater than price.
Answer the following statement true (T) or false (F)
A central government collected taxes totaling $120 billion in the previous year. It's expenditure during the year was roughly the same. This is an example of a
a. balanced budget. b. surplus budget. c. deficit budget. d. zero budget.
The purchasing power parity theory claims that a change in relative ________ between two countries must cause a change in ________ in order to keep the prices of goods in two countries fairly similar.
A) exchange rates; inflation B) inflation; exchange rates C) interest rates; inflation D) interest rates; exchange rates
Refer to the above graph of a representative firm in monopolistic competition. What does line 1 represent?
A. Marginal cost B. Demand C. Marginal revenue D. Average total cost