| Wealth Effect |
Article Index for Wealth |
Website Links For Wealth |
Information AboutWealth Effect |
| CATEGORIES ABOUT WEALTH EFFECT | |
| wealth | |
| SHOPPER'S DELIGHT | |
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The effect includes the changes in the amounts and composition of ), or when people perceive themselves to be "richer" (for example, the assessed value of their home increases, or a stock they own has gone up in price recently). Economists also believe that this situation has Macroeconomic implications. A typical response to the wealth effect includes a reduced supply of labor; however, personal income will still be increased. This can be seen by the parallel outward shift in the production function, which is indicative of the wealth effect. The effect's size is governed by a different calculation in either case: SEE ALSO EXTERNAL LINKS |