Which of the Following Best Describes a Liability

question 111

Multiple Choice

Which of the following best describes a liability?

• A) Liabilities are future economic benefits to which a company is entitled.
• B) Liabilities are a form of share capital.
• C) Liabilities are economic obligations to creditors to be paid at some future date by the company.
• D) Liabilities are accounts receivable of the company.

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Definitions:

Government Spending

Expenditures by the government sector on goods and services, including infrastructure, education, defense, and healthcare, impacting an economy's aggregate demand.

Budget Deficit

A situation where a government's expenditures exceed its revenues within a specific fiscal period, leading to borrowing or debt accumulation.

Loanable Funds

The funds accessible for lending within the financial market.

Equilibrium Interest Rate

The interest rate at which the quantity of money demanded equals the quantity of money supplied, stabilizing the economy.