Which One of These Is Indicative of a Short-Term Restrictive

question 3

Multiple Choice

Which one of these is indicative of a short-term restrictive financial policy?

• A) Purchasing inventory on an as-needed basis
• B) Granting credit to all customers
• C) Investing heavily in marketable securities
• D) Maintaining a large accounts receivable balance
• E) Keeping inventory levels high

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Definitions:

Shortages

A situation where the demand for a product or service exceeds the supply available at a specific price.

Price Floor

A government- or authority-imposed minimum price set above the equilibrium price, preventing sellers from trading at lower prices.

Surplus

An excess of something, often used in economic contexts to describe a situation in which supply exceeds demand.

Shortage

A situation where the demand for a product exceeds its supply at the current price, leading to a scarcity of the product in the market.