What Is a Compensating Balance

question 71

Multiple Choice

What is a compensating balance?

• A) the cash a firm places into short-term investments
• B) the cash a firm holds in order to pay its bills
• C) the cash a firm holds to gain tax advantages
• D) the cash a firm holds in an account at the bank in order for the bank to perform services for that firm

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Definitions:

Hypertrophic

Referring to excessive growth or enlargement of an organ or tissue.

Restrictive

Limiting the freedom of action or movement; imposing constraints on something.

Hypothyroidism

A condition characterized by the underproduction of thyroid hormones, which can lead to fatigue, weight gain, and cold intolerance.

Surgical Removal

The process of excising or taking out surgically a part of the body or a foreign object from the body.