Asked by
Verified
A firm will likely be turned down for credit due to concerns about its ___________ if there are signs that the firm's industry is in general decline.
A) Capacity.
B) Character.
C) Capital.
D) Collateral.
E) economic conditions
Economic Conditions
The state of the economy at a given time, encompassing factors like inflation rates, unemployment levels, GDP growth, and consumer spending.
General Decline
A broad decrease in stock prices or market indices, typically pointing to negative market sentiment or economic downturns.
Credit
A setup where merchandise, services, or cash is given in return for a commitment to repay a specific amount of money on a predetermined future date.
- Identify the effect of economic conditions on a firm’s credit evaluation.
Verified Answer
Learning Objectives
- Identify the effect of economic conditions on a firm’s credit evaluation.
Related questions
All Else Equal, the Credit Period Offered to a Firm's ...
An Increase in Product Perishability Will Tend to Lead to ...
An Increase in Consumer Demand for the Product Will Tend ...
Relatively Standardized Products Tend to Have Relatively Short Credit Periods
A Firm in a Competitive Industry Institutes a Change in ...