Suppose That Doug's Only Assets Are an Automobile Worth $10,000

question 58

Multiple Choice

Suppose that Doug's only assets are an automobile worth $10,000 and a checking account with a $5,000 balance. His only liabilities are a student loan balance of $12,000 and a balance of $9,000 on his car loan. What is his net worth?

• A) $21,000
• B) $15,000
• C) $6,000
• D) Doug is currently insolvent.
• E) None of the above statements are correct.

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Definitions:

Expected Rate

The anticipated return on an investment over a specific period, often used for forecasting.

Inflation

A rise in the general price levels of goods and services in an economy over a period of time.

Labor Force

The total number of people who are of working age (typically 16 years and over), capable of, and seeking employment.

Discouraged Workers

Individuals who are not actively looking for employment because they believe no jobs are available for them.