What would be the effect of an increase in the difference between short-term and

Question

What would be the effect of an increase in the difference between short-term and long-term rates? Firms would tend to shift towards more relaxed financing of current assets. Firms would tend to shift towards stiffer collection policies. Firms would tend to shift towards more restrictive financing of current assets. None of the above Firms would tend to shift towards more relaxed financing of current assets. Firms would tend to shift towards stiffer collection policies. Firms would tend to shift towards more restrictive financing of current assets. None of the above Firms would tend to shift towards more relaxed financing of current assets. Firms would tend to shift towards stiffer collection policies. Firms would tend to shift towards more restrictive financing of current assets. None of the above

Explanation / Answer

Firms would tend to shift towards more restrictive financing of current assets.

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