Which One of the Following Statements Is Correct

question 68

Multiple Choice

Which one of the following statements is correct?

• A)Seasonal needs are financed externally when firms adhere to a flexible financing policy.
• B)A flexible financing policy tends to increase the risk of encountering financial distress.
• C)Long-term interest rates tend to be less volatile than short-term rates.
• D)Most firms tend to finance inventory with long-term debt.
• E)Short-term interest rates are generally higher than long-term rates.

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Definitions:

Protectionism

The economic policy of restricting imports from other countries through methods like tariffs and quotas to protect domestic industries.

Frederic Bastiat

Frederic Bastiat was a 19th-century French economist and writer known for his advocacy of free markets, individual freedoms, and his critiques of socialism.

Balance-Of-Trade Deficit

A situation where a country's imports exceed its exports, leading to a negative balance in trade.

Coal

A fossil fuel used primarily for electricity generation and steel production, composed mostly of carbon.