12 Questions
What is a crucial criterion for granting credit according to the text?
Stable money standard
Why do creditors need absolute confidence in debtors' character and ability?
To ensure debtors honor and settle their obligations
What characteristic enables an individual to obtain goods and services without cash?
Credit as a power
Why is it necessary for the money standard to be stable in the credit system?
To prevent uncertainty in purchasing power
What must be available for those granting credit to make a correct evaluation of credit rating?
Sources of credit information
How does credit as a power benefit individuals?
By enabling them to acquire goods and services without cash
What is the main characteristic of credit according to the text?
Use of trust
Which type of credit is described as being extended to consumers for personal consumption or enjoyment?
Consumer Credit
What is the primary reason for Consumer Credit according to the text?
Desire for convenience
Which type of credit is specifically given by commercial banks to assist businessmen in their operations?
Commercial Bank Credit
What is a key characteristic of Mercantile Credit as described in the text?
Required only during processing time
In what type of enterprise is credit considered the motive power according to the text?
All types of enterprises
Test your knowledge on the foundational principles of a credit system including the importance of creditors' confidence in debtors, proper credit facilities, and sources of credit information. Explore key criteria for granting credit.
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