Wealth is
A) the sum of the value of assets.
B) equal to income.
C) a flow variable.
D) the sum of the value of assets minus the sum of the value of liabilities.

Question

Quizplus · Accepted Answer

Wealth is the sum of the value of assets minus the sum of the value of liabilities. This is because wealth represents the net value of one's possessions, i.e. what one owns minus what one owes. Option A is incorrect because it does not take into account the liabilities. Option B is incorrect because income is not the same as wealth. Option C is incorrect because wealth is a stock variable, representing a specific point in time, while flows represent changes over time.

Wealth Is