Which of the Following Statements Regarding How a Firm Should

question 55

Multiple Choice

Which of the following statements regarding how a firm should finance its cash needs is true?

• A) Permanent working capital should be financed by long-term sources of funds, while temporary working capital should be financed by short-term sources of funds.
• B) Permanent working capital should be financed by short-term sources of funds, while temporary working capital should be financed by long-term sources of funds.
• C) Both permanent working capital and temporary working capital should be financed by short-term sources of funds.
• D) Both permanent working capital and temporary working capital should be financed by long-term sources of funds.

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Definitions:

Extinction

In behavioral psychology, it refers to the gradual weakening and disappearance of a conditioned response when the conditioned stimulus is no longer paired with the unconditioned stimulus.

CR Fading

A technique in conditioning where the conditioned response diminishes over time when reinforcement is removed.

Conditioned Fear

A learned response to a previously neutral stimulus that has been repeatedly paired with an aversive stimulus, leading to the elicitation of fear responses to the neutral stimulus.

Little Albert

An experiment by John B. Watson demonstrating that fear could be conditioned in humans, using a young boy to show how emotional responses could be classically conditioned.