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

On the war example, if the money is still there, wouldn’t that mean people do have a net worth?

As far as being leveled, wouldn’t that mean there is just no infrastructure?

In this scenario, the countries infrastructure is an asset to the country, if it is destroyed then the country has less assets.

As far as the sandwich scenario, you are trading money for a sandwich, which provides you with energy to make more money, so you can buy more sandwiches.

Society might lose one sandwich when you eat it, but it gains the increase in energy you gain from consuming the sandwich.