How Many of These Ratios Measure the Relationship Between Debt

question 52

Multiple Choice

How many of these ratios measure the relationship between debt and equity?
The debt ratio
The equity (proprietorship) ratio
The leverage ratio (total assets/total equity)
The current ratio

• A) 1
• B) 2
• C) 3
• D) 4

---

Definitions:

Centrally Planned Economy

An economic system where the government or central authority makes all decisions about the production and distribution of goods and services.

Market Economy

An economic system where supply and demand from consumers and businesses drive the production of goods and services and set prices.

Produce

To create, manufacture, grow, or bring into existence goods or services.

Socialist Country

A nation where the government owns and controls major industries and resources, aiming to distribute wealth and opportunities more evenly.