If a Company Has Made Arrangements with a Bank to Borrow

question 13

Multiple Choice

If a company has made arrangements with a bank to borrow money in the months when they have a negative cash balance, this arrangement is a:

• A)letter of credit.
• B)demand loan
• C)long-term loan.
• D)term deposit.

---

Definitions:

Production Possibilities

The various combinations of goods and services an economy can produce given its available resources and technology.

Opportunity Cost

The price paid for not selecting the second-best choice when deciding between options.

Rancher

An individual who owns or manages a large farm, especially one used for raising cattle, sheep, or other livestock.

Comparative Advantage

The ability of an entity to produce goods or services at a lower opportunity cost than others.