Question

What are restrictions placed on a company's economic activities by creditors called?

Answer 1

Covenants or loan conditions are restrictions placed by creditors on a company's economic activities to limit default risks and protect investments.

Step-by-step explanation:

Restrictions placed on a company's economic activities by creditors are referred to as covenants or loan conditions. These restrictions are designed by creditors to limit the risk of default and protect their investment. In the context of credit cards, political pressures can arise for setting limits on the interest rates, which is a form of price ceiling in financial markets, often referred to as usury laws. Companies argue that these ceilings can affect their ability to cover losses from customers who do not repay their credit card debts.

Answer 2

The answer to the question above is "the credit control" which is the restriction placed on a company's economic activities by creditors based on its job description. The credit control provides the information about the feasibility and of a company. This restriction is provided to avoid the credit failure.