An Example of How Financial Intermediaries Can Assist in Shifting

question 58

Multiple Choice

An example of how financial intermediaries can assist in shifting an individual's consumption forward in time is:

• A)Providing a line of credit.
• B)Opening a passbook account.
• C)Starting a life insurance policy.
• D)Investing in an index fund.

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Definitions:

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue, indicating the company's profit.

Trial Balance

An accounting report that lists the balances of all accounts in the general ledger at a particular point in time to check for errors.

Cash

Liquid assets held by a company, used to settle debts, purchase goods and services, or meet immediate needs; a fundamental indicator of financial health.

Debt Ratio

A financial ratio that measures the proportion of a company's total debt to its total assets, indicating the company's leverage.