What’s it called if I buy something like a sandwich, then consume it, and the net worth of society has now shrunk by 1 sandwich? Versus buying something that keeps its value.

Question

Maybe a better example would be a country getting leveled in a war. All of the money is still there, but now everyone is poor and has no net worth. How does that work?

It seems kind of like losing that amount of money, even though we didn’t?

In: 3475

Answer 1

Economic assets can be used up (like the sandwich) or destroyed (as in war) and wealth goes down as a result. Wealth is *measured* in money, but describes all of the assets we have.
If your house burns down with all of your stuff inside, then you are suddenly much poorer.