What Is Temporary Working Capital

question 48

Multiple Choice

What is temporary working capital?

• A) the amount that a firm must keep invested in its short-term assets to support its continuing operations
• B) the difference between the actual level of investment in short-term working capital needs and its permanent working capital investment
• C) the amount that a firm keeps invested in its short-term assets to support its continuing operations which are financed by short-term debt
• D) the amount that a firm keeps invested in its short-term assets to support its continuing operations which are financed by long-term debt

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Definitions:

WTO

The World Trade Organization, an international body that deals with the rules of trade between nations to ensure that trade flows as smoothly, predictably, and freely as possible.

World Bank

The World Bank is an international financial institution that provides loans and grants to the governments of poorer countries for the purpose of pursuing capital projects aimed at reducing poverty and supporting development.

Modern Economy

Characterizes economies that are highly industrialized and usually have a significant reliance on technology and service sectors.

Specialization and Exchange

This concept depicts how individuals, firms, and nations can increase their productivity through specialization in tasks they perform best and exchanging their outputs for other goods and services.