Question

Which statement CANNOT be true? a Joe is wealthy, even though he earns no income. b...

Which statement CANNOT be true?

a

Joe is wealthy, even though he earns no income.

b

Jane earns a very high salary but has negative net wealth.

c

Wealth measures the flow of income.

d

High-income earners can be in debt.
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Answer #1

One can be wealthy, even when he earns no income. Wealth can be inherited or gifted.

One can earn a high salary but can have negative net wealth. This situation may arise, when the person does not have any asset inherited and is under the high burden of debt.

Even high earners can be in debt. This situation arises when one believes in making money using debt funds.

Wealth is a stock variable. It does not measure the flow of income. It can be inherited or gifted.

Hence, option c cannot be true.

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