If the Bank of England's Deposit Account with the Fed

question 23

Multiple Choice

If the Bank of England's deposit account with the Fed increases by $1 million, the monetary base will

• A)increase by $1 million times the dollar/pound exchange rate prevailing on that day.
• B)decrease by $1 million times the dollar/pound exchange rate prevailing on that day.
• C)decrease by $1 million.
• D)increase by $1 million.

---

Definitions:

Dividend Payout Ratio

The portion of earnings a company pays to its shareholders in the form of dividends, expressed as a percentage of the company's total net income.

Retention Ratio

The proportion of net income that is retained by a corporation rather than distributed to its shareholders as dividends.

Retained Earnings

The portion of a company's profits not distributed to shareholders as dividends and retained for reinvestment or debt repayment.

Pro Forma Net Income

A projected net income over a specific period, calculated under hypothetical assumptions or adjustments.