A Central Bank's Open Market Operations Represent the Purchase and Sale

question 33

Multiple Choice

A central bank's open market operations represent the purchase and sale of ______________ to and from the banking sector.

• A) the money supply
• B) non-monetary assets
• C) cash holdings
• D) savings.

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Definitions:

Horizontal Equity

The principle that individuals with similar income or assets should pay the same amount in taxes.

Vertical Equity

A principle in taxation where taxpayers with a greater ability to pay, pay more in taxes, demonstrating a progressive tax system.

Small Economy

An economy that is limited in size, characterized by a smaller population, lower GDP, and less impact on international markets compared to larger economies.

Horizontal Equity

A principle in taxation that asserts that individuals with the same income or resources should pay the same amount in taxes.