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A ................. enables a business to maintain a __ balance on its bank account. It represents a very flexible form of borrowing as it can be easily and quite quickly increased or decreased, subject to the bank's approval. (Select the missing pair of words below to complete the sentence) bank overdraft and negative long-term loan and negative bank overdraft and positive bank overdraft and positive

Question

A ................. enables a business to maintain a __ balance on its bank account. It represents a very flexible
form of borrowing as it can be easily and quite quickly increased or decreased, subject to the bank's approval.
(Select the missing pair of words below to complete the sentence)
bank overdraft and negative
long-term loan and negative
bank overdraft and positive
bank overdraft and positive

A ................. enables a business to maintain a __ balance on its bank account. It represents a very flexible form of borrowing as it can be easily and quite quickly increased or decreased, subject to the bank's approval. (Select the missing pair of words below to complete the sentence) bank overdraft and negative long-term loan and negative bank overdraft and positive bank overdraft and positive

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OrvilleProfessional · Tutor for 6 years

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Bank Overdraft and Negative

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## Step 1: Analyzing the Question<br />The statement mentions that it "enables a business to maintain a certain balance on its bank account", suggesting that the option will either allow the account to have a negative or positive balance, depending on the choice.<br /><br />## Step 2: Eliminating Options<br /><br />Considering the implications of both "bank overdraft" and "long-term loan", it can be seen based on typical banking regulations and practices, a bank overdraft would allow a business to maintain a negative balance as the bank lends money to cover expenditure past the account balance. On the other hand, a long-term loan doesn't apply in this context, as it does not permit a business to maintain a negative balance on its account. The loan amount would be added to the account, improving the balance but not allowing it to go into a negative state.<br /><br />Moreover, the phrase "can be easily and quite quickly increased or decreased" is describing the feature typically attributable to a "bank overdraft" but not applicable in the case of a long-term loan, where increasing (loan renegotiation) or decreasing (early repayment) is often more time-consuming and subjected to various terms and conditions.
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