The short-term accumulation of financial assets on the part of business corporations:
A)are held in short-term, safe, and liquid debt obligations
B)add to the level of long-term savings of the economy as a whole
C)do not enter the monetary stream to fund consumers, government, or other businesses
D)are held in the form of long-term obligations of the federal government

Question

Quizplus · Accepted Answer

Business corporations tend to hold their short-term financial assets in safe and liquid debt obligations, such as treasury bills or commercial paper. This allows them to access funds quickly if needed, while also earning a return on their investments.

B, C, and D are incorrect because they do not accurately describe the short-term accumulation of financial assets by business corporations. These assets do not necessarily add to the long-term savings of the economy, do enter the monetary stream to a certain extent, and are not typically held in the form of long-term obligations of the federal government.

The Short-Term Accumulation of Financial Assets on the Part of Business