Determine the relation between wealth and saving.

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Answer 1

Question

Chapter 8, Problem 1RQ

To determine

Determine the relation between wealth and saving.

Expert Solution & Answer

Explanation of Solution

The wealth measures the current value of a stock of assets owned by someone or society as a whole. That means, the wealth is a stock variable. For example, if a person says that ‘I have $10,000 in my bank account’, then it is the wealth of that person for that particular moment whereas saving is a flow variable, which is measured as per the unit of time. For example, if a person says that ‘I save $10 per week’, then it indicates one-week savings of that person. Here, the amount of wealth is increased at a growth rate of $20 per weeks.

Saving is not the only source that increases the wealth of a person. The value of wealth will also increase when the value of the assets held by an individual rise, this is called the capital gain. For example, Person B holds $2,000 in stock. Hence, when 2% increase in the value of assets causes increase in the value of wealth to $2040 (20% of 2000 plus 2000).

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Answer 2

Question

Chapter 8, Problem 1RQ

To determine

Determine the relation between wealth and saving.

Expert Solution & Answer

Explanation of Solution

The wealth measures the current value of a stock of assets owned by someone or society as a whole. That means, the wealth is a stock variable. For example, if a person says that ‘I have $10,000 in my bank account’, then it is the wealth of that person for that particular moment whereas saving is a flow variable, which is measured as per the unit of time. For example, if a person says that ‘I save $10 per week’, then it indicates one-week savings of that person. Here, the amount of wealth is increased at a growth rate of $20 per weeks.

Saving is not the only source that increases the wealth of a person. The value of wealth will also increase when the value of the assets held by an individual rise, this is called the capital gain. For example, Person B holds $2,000 in stock. Hence, when 2% increase in the value of assets causes increase in the value of wealth to $2040 (20% of 2000 plus 2000).

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Answer 3

Question

Chapter 8, Problem 1RQ

To determine

Determine the relation between wealth and saving.

Expert Solution & Answer

Explanation of Solution

The wealth measures the current value of a stock of assets owned by someone or society as a whole. That means, the wealth is a stock variable. For example, if a person says that ‘I have $10,000 in my bank account’, then it is the wealth of that person for that particular moment whereas saving is a flow variable, which is measured as per the unit of time. For example, if a person says that ‘I save $10 per week’, then it indicates one-week savings of that person. Here, the amount of wealth is increased at a growth rate of $20 per weeks.

Saving is not the only source that increases the wealth of a person. The value of wealth will also increase when the value of the assets held by an individual rise, this is called the capital gain. For example, Person B holds $2,000 in stock. Hence, when 2% increase in the value of assets causes increase in the value of wealth to $2040 (20% of 2000 plus 2000).

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Answer 4

Question

Chapter 8, Problem 1RQ

To determine

Determine the relation between wealth and saving.

Expert Solution & Answer

Explanation of Solution

The wealth measures the current value of a stock of assets owned by someone or society as a whole. That means, the wealth is a stock variable. For example, if a person says that ‘I have $10,000 in my bank account’, then it is the wealth of that person for that particular moment whereas saving is a flow variable, which is measured as per the unit of time. For example, if a person says that ‘I save $10 per week’, then it indicates one-week savings of that person. Here, the amount of wealth is increased at a growth rate of $20 per weeks.

Saving is not the only source that increases the wealth of a person. The value of wealth will also increase when the value of the assets held by an individual rise, this is called the capital gain. For example, Person B holds $2,000 in stock. Hence, when 2% increase in the value of assets causes increase in the value of wealth to $2040 (20% of 2000 plus 2000).

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Answer 5

Chapter 8, Problem 1RQ

To determine

Determine the relation between wealth and saving.

Expert Solution & Answer

Explanation of Solution

The wealth measures the current value of a stock of assets owned by someone or society as a whole. That means, the wealth is a stock variable. For example, if a person says that ‘I have $10,000 in my bank account’, then it is the wealth of that person for that particular moment whereas saving is a flow variable, which is measured as per the unit of time. For example, if a person says that ‘I save $10 per week’, then it indicates one-week savings of that person. Here, the amount of wealth is increased at a growth rate of $20 per weeks.

Saving is not the only source that increases the wealth of a person. The value of wealth will also increase when the value of the assets held by an individual rise, this is called the capital gain. For example, Person B holds $2,000 in stock. Hence, when 2% increase in the value of assets causes increase in the value of wealth to $2040 (20% of 2000 plus 2000).

Answer 6

Chapter 8, Problem 1RQ

To determine

Determine the relation between wealth and saving.

Expert Solution & Answer

Explanation of Solution

The wealth measures the current value of a stock of assets owned by someone or society as a whole. That means, the wealth is a stock variable. For example, if a person says that ‘I have $10,000 in my bank account’, then it is the wealth of that person for that particular moment whereas saving is a flow variable, which is measured as per the unit of time. For example, if a person says that ‘I save $10 per week’, then it indicates one-week savings of that person. Here, the amount of wealth is increased at a growth rate of $20 per weeks.

Saving is not the only source that increases the wealth of a person. The value of wealth will also increase when the value of the assets held by an individual rise, this is called the capital gain. For example, Person B holds $2,000 in stock. Hence, when 2% increase in the value of assets causes increase in the value of wealth to $2040 (20% of 2000 plus 2000).

Answer 7

Chapter 8, Problem 1RQ

To determine

Determine the relation between wealth and saving.

Answer 8

Expert Solution & Answer

Explanation of Solution

The wealth measures the current value of a stock of assets owned by someone or society as a whole. That means, the wealth is a stock variable. For example, if a person says that ‘I have $10,000 in my bank account’, then it is the wealth of that person for that particular moment whereas saving is a flow variable, which is measured as per the unit of time. For example, if a person says that ‘I save $10 per week’, then it indicates one-week savings of that person. Here, the amount of wealth is increased at a growth rate of $20 per weeks.

Saving is not the only source that increases the wealth of a person. The value of wealth will also increase when the value of the assets held by an individual rise, this is called the capital gain. For example, Person B holds $2,000 in stock. Hence, when 2% increase in the value of assets causes increase in the value of wealth to $2040 (20% of 2000 plus 2000).