The Three Main Working Capital Strategies Discussed in the Text

question 177

Multiple Choice

The three main working capital strategies discussed in the text, aggressive, conservative, and moderate, differ primarily in the

• A)Relative amount of short-term debt used.
• B)Minimum level of permanent current assets.
• C)Relative amount of long-term debt versus equity used to finance permanent current assets.
• D)Average level of temporary current assets.
• E)Amount of trade credit used.

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Definitions:

Stabilization Policy

Government policies aimed at maintaining economic stability by controlling inflation, reducing unemployment, and promoting growth.

Aggregate Output

The total value of all goods and services produced in an economy during a specific period, often used interchangeably with gross domestic product (GDP).

Stabilization Policy

A government strategy aimed at maintaining economic stability by adjusting spending levels and tax rates.

Fiscal Policies

Government actions involving taxation and spending to influence the economy.