When product demand is high,firms following a "middle of the road policy" for long- versus short-term financing will:

Question

Quizplus · Accepted Answer

When product demand is high, firms may need to finance the increased production and inventory levels, and borrowing short term would allow them to quickly access funds to meet this demand. Long-term financing may take longer to secure and may not be necessary if the high demand is only temporary. Holding or selling marketable securities may not provide enough funding to meet the increased demand.

When Product Demand Is High,firms Following a "Middle of the Road