During a Credit Crunch, Financing Constraints Become Prevalent and Investment

question 20

Multiple Choice

During a credit crunch, financing constraints become prevalent and investment spending .

• A)more; increases
• B)more; decreases
• C)less; increases
• D)less; decreases

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Definitions:

Financial Statement

A written record that conveys the business activities and the financial performance of a company.

Permanent/Temporary

Refers to the classification of accounts based on their longevity; permanent accounts are not closed at the end of the accounting period, while temporary accounts are.

Net Sales

Total sales revenue less returns, allowances, and discounts.

Percentage Increase

A measure of the degree to which a quantity has grown compared to its previous value, expressed as a percentage.