(Table: Central Bank Balance Sheet) Using the Balance Sheet Provided

question 25

Multiple Choice

(Table: Central Bank Balance Sheet) Using the balance sheet provided, if the central bank issues 100 million more in foreign debt, then:

• A) the backing ratio would be equal to 95%.
• B) the backing ratio would be equal to 105%.
• C) there is no change in the backing ratio.
• D) the backing ratio would decrease to 50%.

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Definitions:

Adequate Cash Flow

Sufficient amounts of cash on hand that an entity has to meet its financial obligations and operational needs.

Bills

Documents indicating a transaction or an obligation to pay for goods or services received.

QBO

Refers to QuickBooks Online, an accounting software based in the cloud, aimed at assisting small to medium businesses.

Expenses

The costs incurred by a business or individual in the process of earning revenue.