There is ____ relationship between a firm's liquid asset balance and "shortage" costs.

Question

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An inverse relationship exists between a firm's liquid asset balance and "shortage" costs. As a firm's liquid asset balance increases, "shortage" costs decrease because the firm has more cash on hand to cover unexpected expenses or short-term cash needs. Conversely, if a firm has a low liquid asset balance, it may face shortage costs if it cannot cover unexpected expenses or meet short-term cash needs.

There Is ____ Relationship Between a Firm's Liquid Asset Balance