Final answer:
For an exporter with a well-established relationship, sales on open account is the ideal financing method. In the historical trading system, Muslim traders employed letters of credit for safety. In the financial market, the quantity of loans increases with a rise in either the demand for loans or the supply of capital. Therefore, C is the correct answer.
Step-by-step explanation:
The most suitable financing method for an exporter that enjoys good relations with a buyer in a well-established market would be C) sales on open account. This arrangement implies a high level of trust between the exporter and the buyer, as it allows the buyer to pay for the goods after they have been delivered, typically within an agreed period. This approach simplifies the transaction and minimizes financial costs for the buyer while providing the exporter with a competitive advantage in the market. While other methods like letters of credit and cash in advance provide more security to the seller, they may not be necessary with a trusted partner and may even hinder the relationship with additional procedures and costs.
In the context of the historical trading system, Muslim traders often relied on c. letters of credit to avoid having to carry large amounts of gold over great distances.
Regarding changes in the financial market, an a. rise in demand for loans or c. a rise in supply of capital available to lend will generally lead to an increase in the quantity of loans made and received. A rise in supply could be due to lower interest rates or an increase in savings, while a rise in demand could stem from economic growth or increased creditworthiness.