Which of the Following Statements Is True Regarding the Ratio

question 20

Multiple Choice

Which of the following statements is true regarding the ratio analysis of Intergovernmental Revenues to Total Revenues?

• A)A high, or, increasing, ratio of intergovernmental revenues to total revenues is a sign of risk and is generally considered a positive fiscal characteristic.
• B)A low, or, decreasing, ratio of intergovernmental revenues to total revenues is a sign of risk and is generally considered a negative fiscal characteristic.
• C)A low, or, increasing, ratio of intergovernmental revenues to total revenues is a sign of risk and is generally considered a negative fiscal characteristic.
• D)A high, or, increasing, ratio of intergovernmental revenues to total revenues is a sign of risk and is generally considered a negative fiscal characteristic.

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Definitions:

Excess Reserves

The amount of reserves that a bank holds beyond the required minimum, often held in excess of reserve requirements set by central banking authorities.

Money Supply

The aggregate monetary value within an economy, including cash, coins, and all balances in checking and savings accounts, at a given moment.

Interest Rates

The cost of borrowing money or the reward for saving, typically expressed as a percentage of the principal.

Equilibrium GDP

The level of Gross Domestic Product where the total output of an economy equals the total demand.