Wealth, Microeconomics

Wealth: This is a stock of accumulated purchasing power stored up from the past.

For example, if you have a fat savings account accumulated from your past earnings, your current spending may be greater than your current income. This implies that what actually determines consumption is not nominal wealth but real wealth, which takes the price level into account.

Expectations: Households` expectations concerning future prices, money income and the availability of goods may have a significant impact on their current spending. Expectations of rising prices and product shortages tend to trigger more spending and less saving, that is, it shifts the consumption function upward and the saving function downward.

Posted Date: 1/3/2013 12:13:06 AM | Location : United States







Related Discussions:- Wealth, Assignment Help, Ask Question on Wealth, Get Answer, Expert's Help, Wealth Discussions

Write discussion on Wealth
Your posts are moderated
Related Questions
Determinants of Private Demand - Linkages with Employment Employment potential of courses in higher education is an important determinant of private investment in higher educa

THEORY OF CUSTOMS UNION: A customs union is an association of two or more countries to encourage trade. The countries making such an arrangement agree to eliminate tariffs and

Economic Ef ficiency The effort to making products and services in the least costly way without sacrificing excellence.

HOW DO YOU ADJUST FISCAL POLICY FOR INTERNAL BALANCE

suppose you have a coffee shop. list of fixed input and variable input for operating the shop. ques-2 describe the condition under in which labour treated as variable cost and whic

What are expansionary and contractionary effects?  Expansionary effect refers to the effect of raising the equilibrium level of national income. For example, an increase in gov

Bank for International Settlements: An international financial regulatory organization based in Switzerland, Bernethat designs international regulations regarding capital adequacy


Question: Third degree price discrimination Suppose that a monopolist faces two markets with demand curves given by D(p 1 ) = 100 - p 1 D(p 2 ) = 100 - 2p 2 Assume that

SUPPOSE A MONOPOLIST FACES A DEMAND CURVE OF D(P)=10-P AND HAS A FIXED SUPPLY OF 7 UNITS OF OUTPUT TO SELL.WHAT IS THE PROFIT MAXIMIMISING PRICE AND WHAT ARE ITS MAXIMUM PROFITS