Which of the Following Statements Is Most Correct

question 122

Multiple Choice

Which of the following statements is most correct?

• A) Trade credit is provided to a business only when purchases are made.
• B) Commercial paper is a form of short-term financing that is primarily used by large, financially stable companies.
• C) Short-term debt, while often cheaper than long-term debt, exposes a firm to the potential problems associated with rolling over loans.
• D) Statements b and c are correct.
• E) All of the statements above are correct.

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Definitions:

Supply-Siders

Advocates of the economic theory that reducing taxes and regulations on businesses stimulates production and economic growth.

Rational Expectationists

Economists who believe that individuals and firms use all available information when making economic decisions, leading to outcomes that can be anticipated based on past trends.

Fiscal Policy

Government policies on taxation and spending that are used to influence the economy.

Stabilization Policies

Economic strategies and actions taken by governments or monetary authorities to stabilize the economy, aiming to reduce fluctuations in the business cycle.