If a Bank Makes a Loan of $5,000, Which Is

question 211

True/False

If a bank makes a loan of $5,000, which is then withdrawn in cash and spent in another country, the money supply will not grow.

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Definitions:

Short-Term Note Payable

A debt obligation due within one year or within the normal operating cycle of the business, used to finance short-term financing needs.

Receivables Turnover Ratio

A financial metric used to assess how efficiently a company collects cash from its credit sales by dividing total credit sales by the average accounts receivable.

Payments Quickly

Payments quickly refers to the process of settling financial transactions or obligations in a brief period of time, enhancing liquidity and cash flow management.

Average Collection Period

The average number of days it takes for a company to receive payments from its credit customers.