Financial Assets and Money- Macro 4.1 and 4.3

The video introduces key financial vocabulary, explaining the differences between income and wealth, assets and liabilities, and government budgeting concepts like surplus and deficit. It covers financial assets, focusing on liquidity, loans, bonds, and stocks, and concludes with a brief overview of future topics like money and banking.

What is the primary difference between income and wealth?

• Income is the money earned from work, while wealth is the total value of assets.

• Income is the total value of assets, while wealth is the money earned from work.

• Income and wealth are the same thing.

• Income is earned from investments, while wealth is earned from jobs.

What does a budget deficit indicate about a government's spending?

• The government has a surplus of funds.

• The government is spending less than its tax revenue.

• The government is spending more than its tax revenue.

• The government has no financial obligations.

Which of the following is considered a financial asset?

• A bond

• A liability

• A car loan

• A student loan

What is liquidity in financial terms?

• The ease of converting an asset into cash

• The amount of money borrowed from a lender

• The ability to earn interest on an asset

• The total value of all assets owned

How does the stock market generally react to the economy?

• It causes the economy to go up or down.

• It remains unaffected by economic changes.

• It reacts to the economy going up or down.

• It is a direct indicator of economic health.