Which Statement Is Not True

question 20

Multiple Choice

Which statement is not true?

• A) A firm should always have a surplus holding of cash.
• B) If a firm has a cash surplus, it should make the best use of the surplus.
• C) If a firm has a cash deficit, it may need to reschedule its cash payments.
• D) If a firm has a cash deficit, it may need to arrange to borrow money.

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Definitions:

Production Possibilities Frontier

A graph that shows the various combinations of output that an economy can possibly produce, given the available factors of production and the available production technology.

Trade-Off

A choice made in a given situation where one aspect of a set or design is reduced or forfeited to improve other elements.

Opportunity Cost

The dropping of possible gains that could come from other alternatives when a specific one is chosen.

Production Technology

The methods and processes used to convert inputs into outputs (goods or services).