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:

Output

The total amount of goods or services produced by a company or economy in a given period.

Production Function

A technological relationship expressing the maximum quantity of a good attainable from different combinations of factor inputs.

Inputs

Resources used in the production process, including labor, capital, materials, and energy.

Marginal Output

The additional amount of output that is produced as a result of a one unit increase in the input of a production process.