A Disadvantage to a Firm's Having Too High an Asset

question 21

Multiple Choice

A disadvantage to a firm's having too high an asset turnover ratio is the ________.

• A) high inventory holding costs
• B) high quantity of stale merchandise on hand
• C) loss of quantity discounts with suppliers
• D) loss of bargaining power with suppliers

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Definitions:

Stagflation

A condition of slow economic growth and relatively high unemployment accompanied by rising prices, or inflation, challenging the usual economic assumptions.

Permanent Income

A theory suggesting that an individual's consumption choices are based on their long-term income expectations rather than their current income.

Economic Decisions

Refers to choices made by individuals, businesses, or governments regarding allocation of resources to satisfy various needs and wants.

Aggregate Supply

The total supply of goods and services available to a particular market from producers at different price levels.