Relation between money - wealth and income, Macroeconomics

Q. Relation between Money - wealth and income?

Money isn't the same as wealth. An individual may be very wealthy however have no money (for instance by owning stocks and real estate). Another individual may have a lot of money however no wealth. This would be the case if an individual with no wealth borrows money from a bank. She will have money (for instance in the form of a deposit in the bank) however no wealth because this deposit exactly matches the outstanding debt. Be careful with this distinction: do not say 'Anna has a lot of money' if you mean that Anna is wealthy.

Money is not same as income and income is not same as wealth. Income is a flow (for instance it is currency units per month) whereas wealth or money is a stock (measured at a certain point in time). Again, it's very possible to have a high income though no money and no wealth, or to be very wealthy and have a lot of money however no income. This is another distinction to be careful with. Do not say that 'Sam makes a lot of money' if you mean that Sam has a high income. Money has a very specific definition in economics!

Posted Date: 8/13/2013 2:55:05 AM | Location : United States

Related Discussions:- Relation between money - wealth and income, Assignment Help, Ask Question on Relation between money - wealth and income, Get Answer, Expert's Help, Relation between money - wealth and income Discussions

Write discussion on Relation between money - wealth and income
Your posts are moderated
Related Questions
Describe in detail about Exchange rate systems Various countries have different exchange rate systems. The most significant characteristic of an exchange rate system is to what

Find the Equilibrium Quantity In a small town only two candy shops operate and they compete with each other in quantity. Consumers do not differentiate between candies sold by

Assume the residents of an economy spend all of their income on cauliflower, broccoli and carrots. In 2003 they buy100 heads of cauliflowers for Rs. 200; 50 bunch of broccoli f

Why is quantitative easing used during liquidity trap when it lowers interest rates too?

Explain clearly the liquidity preference theory of interest propounded by j.m.keynes

#questionAssume that an economy''s GDP Y=5000. Also assume that the government runs a deficit where tax revenue T=1000 and government expendituresG= 1500. The consumption function

Three defective electric tooth brushes were shipped to a drug store by Clean Brush Products along with 17 non defective ones. A) What is the probability the first two electric t

what are the factors that shift the LM curve what is the real interest rate and the nominal interest rate. what is expected rate of inflation why has the real interest rate that cl

During the 1990s, technological advance reduced the cost of computer chips. Explain, with the use supply and demand diagrams, how the following markets are affected in terms of pr