Which of the following statements concerning seasonal credit is true?
A)It tends to have a lower interest rate than federal funds.
B)It has become increasingly more important in recent years.
C)Only firms receiving secondary credit are eligible to receive seasonal credit.
D)Improvements in credit markets have reduced the need for a seasonal credit facility.

Question

Quizplus · Accepted Answer

According to the Federal Reserve, improvements in credit markets have reduced the need for a seasonal credit facility. Therefore, option D is the only true statement. Option A is incorrect because seasonal credit tends to have a higher interest rate than federal funds, and option B is incorrect because the importance of seasonal credit has actually decreased in recent years. Option C is incorrect because firms receiving primary credit can also be eligible for seasonal credit.

Which of the Following Statements Concerning Seasonal Credit Is True