Friction of Distance

question 112

Multiple Choice

Friction of distance

• A) is usually negligible over distances of less than 15 kilometres.
• B) is dependent in part upon an individual's cognitive distance.
• C) is now considered an outdated concept with little current utility.
• D) is another term for the distance-decay function.
• E) is when a car experiences friction from the road it is travelling on.

---

Definitions:

Target Cash Balance

The optimal amount of cash that a company aims to hold at any given time to fulfill operational and transactional requirements.

Interest Rate

The fraction of a loan subject to interest charges for the borrower, commonly stated as an annual percentage of the outstanding loan balance.

BAT Model

Stands for Behavioral Adjustment Tax, a concept in economic theories but without a standard definition; alternatively, it may refer to niche or specific theoretical models not widely recognized in mainstream economics.

Miller-Orr Model

A financial model used to manage the cash inventory of a firm by setting upper and lower limits on cash balances, determining when to transfer funds.