Which One of the Following Is the Most Likely Reason

question 7

Multiple Choice

Which one of the following is the most likely reason why lenders would impose limits on total borrowing?

• A) Financial gearing is too low.
• B) Companies run out of suitable assets to offer as security against loans.
• C) Income gearing is too low.
• D) Financial risk is too high.

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Definitions:

Theory X

A management assumption that employees are inherently lazy, require close supervision and control, and are motivated primarily by financial incentives.

Theory Y

A management approach based on the belief that employees are intrinsically motivated and will seek out responsibility and development if given the opportunity.

Self-fulfilling Prophecies

Situations where an initially false expectation leads to its own confirmation because the expectation influences behavior to make it true.

Theory X

A management theory assuming that employees are inherently lazy and will avoid work if they can, thus needing to be closely supervised and controlled.