A crisis in which there is a shortage of cash for expanding a business after an exponential increase in sales is termed _____.

Question

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A growth trap occurs when a business experiences rapid sales growth, but lacks the necessary cash to fund expansion. This can lead to a crisis where the business is unable to meet demand or make necessary investments in operations. Choices A, B, and C are unrelated terms in accounting and banking.

A Crisis in Which There Is a Shortage of Cash