If Easing a Firm's Credit Policy Lengthens the Collection Period

question 81

Multiple Choice

If easing a firm's credit policy lengthens the collection period and results in a worsening of the aging schedule, then why do firms take such actions?

• A) It normally stimulates sales.
• B) To meet competitive pressures.
• C) To increase the firm's deferral period for payables.
• D) Statements a and b are correct.
• E) All of the statements above are correct.

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Definitions:

Conditioned Stimulus

A once-neutral cue that, after being paired with an unconditioned stimulus, eventually induces a conditioned response.

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers a response without any need for learning.

Unconditioned Response

An automatic, natural reaction to a stimulus that occurs without previous conditioning.

Conditioned Response

The learned response to a previously neutral stimulus that has become conditioned through association with an unconditioned stimulus in classical conditioning.