12 Questions
What is the first criterion mentioned in the text for granting credit?
Evaluation of credit rating
Why must creditors have absolute confidence in the debtors' character and ability according to the text?
To ensure prompt payment of debts
What is the consequence of money not being stable, as per the text?
Decrease in creditors' willingness to lend
How does credit function as a power according to the text?
Expands purchasing ability
What role does the government play in enforcing loan repayment based on the text?
Helping creditors recover loans from debtors
Why are proper facilities for credit operations necessary according to the text?
To evaluate credit ratings accurately
What is a key characteristic of consumer credit?
Extended to consumers for personal consumption
What type of credit is typically used for the purchase of fixed assets or for carrying out business operations?
Investment Credit
What is a motivation behind consumer credit according to the text?
Desire for convenience
Which credit type involves only the length of time needed to process and resell goods?
Mercantile Credit
What is the main function of commercial bank credit according to the text?
To assist businessmen in business operations
What is a common characteristic of mercantile credit based on the text?
Dependent on existing facilities for delivery
Test your knowledge on the fundamental principles of a system of credit, including the importance of creditors' confidence in debtors, the need for proper credit facilities, and the evaluation of credit ratings. Explore key concepts in credit systems.
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