What does the total economic wealth formula consist of?

The total economic wealth formula is designed to capture the overall value of an individual or entity's assets and future income potential. Human capital represents the value derived from the skills, knowledge, and experiences that individuals possess, which contribute to their ability to earn income over their lifetime. Financial capital, on the other hand, refers to the monetary assets or investments that can generate returns.

When combining human capital and financial capital, the total economic wealth reflects a comprehensive understanding of an individual's or entity's potential financial resources. This combination provides a clearer picture of net worth and future earning capacity compared to any other formula that might involve liabilities or divisors.

In this context, the other options do not accurately capture the concept of total economic wealth. For example, subtracting financial capital from human capital does not properly reflect total resources, and including liabilities only serves to diminish the net worth rather than present a comprehensive view of wealth. Thus, the formulation as the sum of human capital and financial capital is essential to accurately represent total economic wealth.