Saving $100 will:
A)increase wealth by $100.
B)increase wealth by $100 only if the $100 is used to purchase an asset.
C)increase wealth by $100 only if the $100 is used to repay a debt.
D)decrease wealth by $100.

Question

Quizplus · Accepted Answer

Savings increases wealth because savings either adds to assets or reduces liabilities. Wealth is defined as assets minus liabilities. Therefore, increasing assets when liabilities are unchanged, or decreasing liabilities when assets are unchanged, will increase wealth.

Saving $100 Will