A ______ Policy Collects Revenues from One Group and Spends

question 48

Multiple Choice

A ______ policy collects revenues from one group and spends it on services for a different group.

• A) redistributive
• B) market-based incentive
• C) regulatory
• D) salient

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Definitions:

Required Reserve Ratio

The minimum fraction of deposits banks are required by law to keep as reserves, either in their vaults or on deposit at a central bank.

Term Auction Facility

A monetary policy tool used by the Federal Reserve to provide short-term loans to banks, aiming to improve liquidity and stability in financial markets.

Bank Insolvency

A situation where a bank's liabilities exceed its assets, making it unable to meet its obligations and continue its operations.

Excess Reserves

Banks' reserves that exceed the minimum requirement set by a central bank, not lent out and often kept for emergency purposes.