ECONOMICS
MONEY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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increase his liabilities.
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decrease his assets.
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increase his market value.
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increase his assets.
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Detailed explanation-1: -To increase his net worth, Jackson could: increase his assets. Savings tools offered by depository institutions may earn interest.
Detailed explanation-2: -ANSWER Your net worth increases when the value of your assets increases more than your liabilities. The purchase of additional assets will not always increase your net worth if you gave up other assets (cash, for example) of equal value to acquire them or if you incurred a liability of equal value to acquire them.
Detailed explanation-3: -How are assets and liabilities connected to net worth? Assets are things with value liabilities are debts or money owed. You subtract liabilities from assets to get your net worth.
Detailed explanation-4: -The most common examples of non-liquid assets are equipment, real estate, vehicles, art, and collectibles. Ownership in non-publicly traded businesses could also be considered non-liquid. With these kinds of assets, the time to cash conversion is difficult to predict.
Detailed explanation-5: -Net worth is the sum of your assets (such as your cash savings, investments, and value of your home) minus the sum of your debts. In other words, it’s what you own minus what you owe.