Which One of the Following Statements Is Correct

question 84

Multiple Choice

Which one of the following statements is correct?

• A)A firm with a restrictive financing policy secures sufficient long-term financing to fund all its assets.
• B)A firm with a flexible financing policy frequently invests in marketable securities.
• C)A firm with a flexible financing policy tends to use short-term financing on a frequent basis.
• D)Firms tend to avoid short-term financing under both restrictive and flexible financing policies.
• E)Firms with seasonal sales select flexible financing policies.

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Definitions:

Laissez-Faire Capitalism

An economic system where private parties are free to engage in economic activities with minimal government intervention.

Classical System

The classical system in economics refers to a school of thought that emphasizes free markets, competition, and the self-regulating nature of economies.

Self-Regulating Markets

A concept where markets operate and correct themselves through the forces of supply and demand without external intervention.

Flexible Wages

A wage system where pay rates can easily adjust in response to changing economic conditions, such as supply and demand for labor.