Which Statement Does Not Correctly Describe Short-Term Financial Decisions

question 74

Multiple Choice

Which statement does not correctly describe short-term financial decisions?

• A) Most firms finance short-term assets with short-term borrowing.
• B) Most firms maintain a positive investment in working capital.
• C) Most firms finance their investment in working capital with short-term debt.
• D) Liquidity is particularly valued by small firms that face relatively high costs to raising funds on short notice.

Describe how consumer and producer surpluses are affected by government interventions in markets.

Recognize the role of government interventions, such as licenses and medallions, in regulating markets.

Evaluate the consequences of government-imposed quantity controls on market efficiency and surplus.

Explain the concepts of demand price, supply price, and how they determine market equilibrium.

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Definitions:

Production Possibilities Frontier

A graph that represents all the highest production options for two or more products, based on a specific set of resources.

Commodity Per Time

A measure of the rate at which goods or services are produced, delivered, or consumed over a specific period.

Other Commodity

General term for any marketable item produced to satisfy wants or needs, distinct from services.

Point C To D

A reference to moving or transitioning from one defined position or condition to another within a given context.