When Product Demand Is High,firms Following a "Middle of the Road

question 118

Multiple Choice

When product demand is high,firms following a "middle of the road policy" for long- versus short-term financing will:

• A) borrow short term.
• B) borrow long term.
• C) hold marketable securities.
• D) sell marketable securities.

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Definitions:

Cyclical Items

Goods or services whose demand fluctuates in a predictable pattern over time due to seasonal, economic, or other cyclic factors.

ABC Analysis

A methodology for classifying inventory items based on their importance, where A items are most valuable, followed by B and then C, to prioritize inventory management efforts.

Annual Units

The quantity of items produced or sold by a company in one year.

Quantities Used

The amounts of materials or resources consumed during the production of goods or services.