What is the difference between money, income, and wealth?
What will be an ideal response?
Income is equal to a person's earnings over a period of time. Wealth is the sum of a person's assets minus the sum of a person's liabilities. Money is a medium of exchange and one component of a person's wealth.
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Over the course of recent years, the college premium has ________
A) remained essentially unchanged B) risen C) fallen D) excluded civilians from calculations of the labor force
When the borrowing constraint is binding, ________
A) wealth is zero B) current consumption is lower than future consumption C) future consumption is lower than current consumption D) consumption smoothing is not possible
If an asset has a present value of $50 and appreciates at an interest rate of 4%, what is the asset's future value in 47 compounding periods?
A) Approximately $400 B) Approximately $316 C) Approximately $137 D) Approximately $1143
After nearly tripling the money supply after the housing market crash and subsequent financial crisis, inflation:
A. has slowly increased, due to restored consumer confidence in the market, increasing the marginal propensity to consume. B. continued to fall, due to the lack of consumer confidence in the market, decreasing the marginal propensity to consume. C. began to spiral out of control, due to the newfound solvency of banks, increasing lending and thus the money multiplier effect. D. stayed relatively low, due to the lack of lending by banks, reducing the effectiveness of the money multiplier.