Credit Rating and Required Rate of Return: Suppose you and Warren Buffett borrow money from a bank. The bank will assess your credit ratings differently. Maybe the bank could offer Warren Buffett a loan without interest since it can be advertised as a bank used by the renowned investor. However, it will likely charge you interest because you have a lower credit rating and less fame than Warren Buffett. The interest rate each borrower faces, based on their creditworthiness, is called the required rate of return for creditors. Under the same conditions, the cost of poverty is much higher for the poor than for the rich. Poverty inherently involves costs. - Joseph’s “just my thoughts”
If the price of bread is one dollar, it signifies that the bread has a monetary value of approximately one dollar. Conversely, this indicates that one dollar represents the intrinsic value of the goods associated with the bread. In other words, the values of money and bread (goods) are established through mutual comparison, which also implies that they do not exist independently in the world, as they are assigned absolute values from the moment of their existence. If only comparison can be made, value can be assessed regardless of whether the comparison is mandatory or voluntary, allowing the value to be expressed as a price, which is its monetary value. This suggests that there is no absolute value in the economy, only relative value , and that all values constructed through comparison are subject to fluctuations in price . Consequently, wealth involves the act of preserving or augmenting this relative value while continually exchanging for other goods as a legitimate act of trad...