The Ability to Pay Bills When Due and to Meet

question 91

Multiple Choice

The ability to pay bills when due and to meet unexpected needs for cash most closely describes

• A) liquidity.
• B) long-term solvency.
• C) profitability.
• D) cash flow adequacy.

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Definitions:

Forecasting Economic Variables

The process of making predictions about future economic activity based on historical and current data, using statistical models and analysis techniques.

Disinflation

Occurs when the rate of inflation declines.

Monetarist View

An economic theory which argues that management of the nation's money supply is the key to controlling inflation and other forms of economic instability.

Economic Stabilization

Efforts or policies aimed at maintaining economic growth, controlling inflation, and reducing unemployment to achieve a stable economy.