The Financial System Is Primarily a Means by Which

question 5

Multiple Choice

The financial system is primarily a means by which

• A)borrowers can use savers' funds until the savers themselves need the funds.
• B)money is put into circulation.
• C)the government puts into operation its plans for the economy.
• D)business firms distribute their goods.

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year with its current assets.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing the ownership interest of shareholders.

Current Assets

Short-term assets that are expected to be converted into cash, sold, or consumed within one year or a business cycle, whichever is longer.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available to run its operations.