Credit System Foundations Quiz
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Questions and Answers

What is a crucial criterion for granting credit according to the text?

  • Government assistance to creditors
  • Facilities for credit operations
  • Availability of credit sources
  • Stable money standard (correct)

    • Why do creditors need absolute confidence in debtors' character and ability?

  • To ensure debtors honor and settle their obligations (correct)
  • To avoid enforcing payment of loans
  • To ensure debtors can obtain goods and services
  • To prevent debtors from accepting obligations

    • What characteristic enables an individual to obtain goods and services without cash?

  • Credit as a power (correct)
  • Government assistance
  • Availability of credit information
  • Facilities for credit operations

    • Why is it necessary for the money standard to be stable in the credit system?

    <p>To prevent uncertainty in purchasing power</p> Signup and view all the answers

    What must be available for those granting credit to make a correct evaluation of credit rating?

    <p>Sources of credit information</p> Signup and view all the answers

    How does credit as a power benefit individuals?

    <p>By enabling them to acquire goods and services without cash</p> Signup and view all the answers

    What is the main characteristic of credit according to the text?

    <p>Use of trust</p> Signup and view all the answers

    Which type of credit is described as being extended to consumers for personal consumption or enjoyment?

    <p>Consumer Credit</p> Signup and view all the answers

    What is the primary reason for Consumer Credit according to the text?

    <p>Desire for convenience</p> Signup and view all the answers

    Which type of credit is specifically given by commercial banks to assist businessmen in their operations?

    <p>Commercial Bank Credit</p> Signup and view all the answers

    What is a key characteristic of Mercantile Credit as described in the text?

    <p>Required only during processing time</p> Signup and view all the answers

    In what type of enterprise is credit considered the motive power according to the text?

    <p>All types of enterprises</p> Signup and view all the answers

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