The Size of the Cash Buffer Depends Upon

question 23

Multiple Choice

The size of the cash buffer depends upon:

• A)the ability to easily acquire financing on short notice
• B)the predictability of cash inflows
• C)management preferences
• D)all the above

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Definitions:

Productive Capacity

The maximum output that an economy can produce without causing inflation, determined by the availability of factors of production.

Classical Economics

A theory that emphasizes the importance of free markets, competition, and self-regulation in the economy.

Full Employment

An economic situation where all available labor resources are being used in the most efficient way possible, indicating low unemployment.

Government Intervention

Involves actions taken by a government to affect the economy, which can include regulations, subsidies, tariffs, and direct spending.