A Retailer's Assets Are Very Small Relative to Its Liabilities

question 95

Multiple Choice

A retailer's assets are very small relative to its liabilities.The retailer has _____.

• A)low fixed assets
• B)low profit margin
• C)high financial leverage
• D)high net worth

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Definitions:

Loanable Funds

A term in economics that refers to all the money available for borrowing, encompassing both savings and credits created in the banking system.

National Saving

The total amount of savings generated within a country, which is equal to the sum of private and public savings.

Government Expenditures

The total amount of money that a government spends in a specific period, including spending on public services, welfare, and infrastructure.

Default

The failure to promptly pay interest or principal when due, which can occur in regard to debts like loans or securities.