What does an economic balance sheet better represent?

The concept of an economic balance sheet primarily focuses on capturing the assets available to fund life-cycle consumption. It emphasizes a broader view of an individual's or entity's financial position beyond mere financial liabilities or obligations. By considering assets in relation to consumption needs over an individual's or organization's life-cycle, it highlights the importance of not just the inventory of assets but also the future cash flows these assets can generate.

An economic balance sheet thus aids in assessing the sustainability and adequacy of resources in fulfilling future consumption requirements. This perspective is critical for effective financial planning and decision-making, particularly when evaluating the long-term viability of an individual's financial health or an organization's operational strategy.

In contrast, the other choices do not encapsulate this holistic view. Options focusing solely on financial liabilities, current market conditions, or investment returns might address specific aspects of financial health but do not provide the comprehensive view of assets aimed at fulfilling consumption needs throughout the life-cycle.