A Line of Credit with a Bank Enables a Company

question 93

Multiple Choice

A line of credit with a bank enables a company to:

• A) Borrow money on demand for short periods of time at specific interest rates
• B) Borrow money for long periods of time with fluctuating interest rates
• C) Borrow money on demand for long periods of time
• D) Borrow money for long periods of time at specific interest rates

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Definitions:

Marginal Utility

The surplus satisfaction or utility experienced by an individual from consuming an extra unit of a particular good or service.

Utility Maximization

The process by which individuals allocate their resources to maximize their satisfaction or utility.

Diminishing Marginal Utility

The principle that as a person increases consumption of a product, there is a decline in the additional satisfaction or utility that person gains from consuming one more unit of the product.

Additional Utils

The extra satisfaction or utility a consumer receives from consuming one more unit of a good or service.