What Is the Difference Between Moral and Selective Incentives? Give

question 62

Essay

What is the difference between moral and selective incentives? Give examples of groups founded on each.

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Definitions:

Excess Reserves

Bank reserves exceeding the reserve requirements set by the central bank, available for lending.

Reserve Requirements

Rules established by central banks that specify the lowest reserve amount that banks are required to maintain against customer deposits.

Checking Accounts

Bank accounts on which the account holder can draw checks against the money deposited.

Time Deposits

Banking or financial accounts that hold funds for a fixed period, during which the depositor cannot access their money without incurring a penalty.