Pro-Forma Financial Statements Are

question 104

Multiple Choice

Pro-forma financial statements are

• A)based on assumed rather than actual results.
• B)used only in analyzing what has occurred in the past.
• C)based on historical data.
• D)not a component of the master budget.

---

Definitions:

Liquidity Trap

A situation where low interest rates fail to increase lending and economic growth due to people preferring to hold onto cash.

Demand Curve

A graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period, typically showing a downward slope from left to right.

Supply of Money

The total value of money available in an economy at a specific time, including cash, coins, and balances in bank accounts.

Tight Monetary Policy

A monetary policy strategy used by central banks to decrease the money supply and increase interest rates to control inflation and stabilize the currency.