Which of the Following Are Associated with a Restrictive Short-Term

question 104

Multiple Choice

Which of the following are associated with a restrictive short-term financial policy?
I. large investments in marketable securities
II. liberal credit terms for customers
III. minimal cash balances
IV. minimal credit sales

• A) I and III only
• B) II and IV only
• C) I and IV only
• D) I and II only
• E) I, II and III only

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Definitions:

Perfectly Competitive

Refers to markets that meet the criteria of perfect competition, ensuring no single buyer or seller can influence prices or market conditions.

Diminishing Returns

A decrease in the marginal output of a production process as the amount of a single factor of production is incrementally increased, holding all other factors constant.

Value Added

The amount by which the value of goods or services is increased at each stage of its production, exclusive of initial costs.

Marginal Product

The increase in output resulting from a one-unit increase in the amount of a single input, holding all other inputs constant.