The Primary Difference Between a Line of Credit and a Short

question 65

Multiple Choice

The primary difference between a line of credit and a short -term loan is

• A) we borrow the entire amount with both the short -term loan and the line of credit.
• B) we borrow the entire amount with the short -term loan, but borrow only what we need with the line of credit.
• C) we borrow only what we need for the current month with both the short -term loan and the line of credit.
• D) we make payments on the line of credit every month to insure that we will have good credit.

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Definitions:

Marginal Tax Rate

Refers to the rate at which the last dollar of income is taxed, indicating the impact of an additional dollar of income on tax liability.

Marginal Tax Rate

is the rate at which the next dollar of income will be taxed, reflecting the percentage of additional income that is paid in tax.

Local Governments

The administrative bodies that govern smaller regions within a country, often responsible for local policies and services.

Expenditure Item

An item or category within a budget or financial statement representing money spent on goods, services, or other expenses.