Final answer:
A short-term notes payable from a loan may result from seasonal fluctuations in sales, where a business needs to cover upfront costs for inventory before peak sales periods. Increased loans can occur with a rise in demand or supply in the financial markets, especially when confidence in repayment is high.
Step-by-step explanation:
A short-term notes payable created from a loan could occur due to seasonal fluctuations in sales. This scenario is common in businesses that experience significant variations in their sales volume throughout the year. For example, a retail store specializing in holiday decorations may require additional funds to stock up inventory before the peak holiday season. The store would take out a short-term loan to purchase this inventory, creating a short-term note payable.
Regarding changes in the financial market, an increase in the quantity of loans made and received can be attributed to a rise in demand for financial capital or a rise in supply of financial resources. When consumers and businesses have greater confidence that they will be able to repay loans in the future, demand for financial capital increases, causing a shift to the right in the quantity demanded at any given interest rate. Likewise, if there's more capital available to lend (rise in supply), it could also lead to an increased quantity of loans being made.