“Whether credit would be useful or not, it depends on the situation”. Give two different examples in support of this statement.
The examples are based on the risks in the situation and whether there is some support in case of loss.
The examples are
(i) A manufacturer taking credit for supplying goods in the festival season usually has low risk, as the products are most likely to be sold completely.
(ii) A small farmer taking credit for crops has larger risks in case of crop failure. His only support in case of loss is the land, which he has to sell.
Thus, it can be concluded that usefulness of credit depends on the situation.