Question:medium

Read the following situation regarding credit and identify the positive impact of credit.
Salim obtains credit to meet the working capital needs of production. The credit helps him to meet the ongoing expenses and complete production on time.

Updated On: Jan 13, 2026
  • The burden of credit will increase on Salim.
  • Salim’s income will increase.
  • The production will decrease.
  • Salim may get stuck in a debt trap.
Show Solution

The Correct Option is B

Solution and Explanation

Strategic credit for productive use, such as covering working capital, facilitates timely production and income generation. Judicious use avoids indebtedness and fosters economic advancement.

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