How is a household's net wealth calculated?
A) as the household's current income minus the value of its liabilities
B) as the household's assets minus its tax liabilities
C) as the household's assets minus its liabilities
D) as the household's assets minus its income

Question

How is a household's net wealth calculated?  
A) as the household's current income minus the value of its liabilities 
B) as the household's assets minus its tax liabilities 
C) as the household's assets minus its liabilities 
D) as the household's assets minus its income

Quizplus · Accepted Answer

Net wealth is calculated as the difference between a household's assets and liabilities. This gives an indication of the household's overall financial position, as it takes into account all of the assets that the household owns (such as property, investments, and savings) as well as any outstanding debts or obligations (such as mortgages, loans, and credit card balances). Neither current income nor tax liabilities factor into calculating net wealth.

How Is a Household's Net Wealth Calculated