The Recent Turbulence in the Financial Markets Has Caused Banks

question 36

Multiple Choice

The recent turbulence in the financial markets has caused banks to ________ their lending standards, making it ________ for small businesses to qualify for loans.

• A)tighten; easier
• B)tighten; more difficult
• C)relax; easier
• D)relax; more difficult

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Definitions:

Operating Activities

The day-to-day activities of a business that are directly related to its principal revenue-generating operations, such as sales and service delivery.

Indirect Method

A cash flow statement reporting approach that adjusts net income for changes in non-cash accounts to compute cash flow from operating activities.

Comparative Balance Sheet

A financial statement that displays a company's financial position at different points in time side-by-side, facilitating period-to-period comparison.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments, reflected in the cash flow statement.