Sue has $1,000 in cash, $1,400 in her checking account, credit card debt of $1,000; $30,000 in stocks and $10,000 in bonds.
a. How much money would a macroeconomist say Sue has?
b. What is her net worth?
c. How would your answers (a) and (b) change if she had $44,000 in additional consumer/credit card loans? Show your calculations.
Money supply is a measure of aggregate value of monetary assets in an economy. There are different monetary aggregates that are commonly used, differing in the liquidity of assets that are included in the aggregate. Monetary base includes only the most liquid assets, i.e., cash.
Answer and Explanation:
a. For macroecononomist, the concept of money is the aggregate value of monetary assets. In this question, Sue has three types of monetary assets:...
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from Economics 102: MacroeconomicsChapter 11 / Lesson 3