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To avoid a shortage of funds, the relationship between funds supplied and funds demanded must be ____________?

To prevent a shortage of funds, the amount of funds supplied must correspond to the amount of funds demanded. A direct relationship ensures that as the demand for funds increases, the supply also increases proportionally, maintaining financial stability and preventing... Read More

1 FINANCE MCQS

To avoid a shortage of funds, the relationship between funds supplied and funds demanded must be ____________?

  • Two-way relationship
  • One-way relationship
  • Direct relationship
  • Inverse relationship
Correct Answer: C. Direct relationship

Detailed Explanation

To prevent a shortage of funds, the amount of funds supplied must correspond to the amount of funds demanded. A direct relationship ensures that as the demand for funds increases, the supply also increases proportionally, maintaining financial stability and preventing liquidity issues.

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