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What is the purpose of the schematic starting with financing sources for the firm, to Macrofinancial...

What is the purpose of the schematic starting with financing sources for the firm, to Macrofinancial factors such as fiscal and monetary policies? What is the role of inventories in this schematic? (short question answer)

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Answer #1

The purpose of the schematic starting with financing sources for the firm, to macro financial factors such as fiscal and monetary policies is:

  • Proper availability of finances from small to large firms
  • To make financing more flexible and affordable according to the assets of the firms
  • To categories the financing sources according to the amount of finance
  • To fulfill the needs of finance

The role of inventories in this schematic: inventories are assets such as machinery, capital, labour etc. of a firm. Inventories plays important role in this schematic by managing finances efficiently. They maintain cash flow in the financial system.

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