Which of the Following Is a Major Source of Short-Term

question 11

Multiple Choice

Which of the following is a major source of short-term financing that is interest free, usually requires no collateral, and is involved in some form in 70-90% of all transactions between businesses?

• A) line of credit
• B) secured loan
• C) unsecured loan
• D) trade credit

---

Definitions:

Collective Benefits

Advantages or positive outcomes that are shared by a group, community, or society from actions or policies, rather than by an individual alone.

Market Failure

Occurs when the allocation of goods and services by a free market is not efficient, often due to reasons like externalities, lack of public goods, or monopolies.

Misallocated Resources

Occurs when resources (like labor, capital, or materials) are not used in the most effective manner, often leading to inefficiencies or lost potential in production or service delivery.

Inequitable

Refers to a lack of fairness or justice in a situation or distribution of resources.