Due to the Recent Fiscal Crisis, There Is Growing Consensus

question 25

True/False

Due to the recent fiscal crisis, there is growing consensus among state legislators and correctional administrators that jail and prison facilities should only be used for the most serious offenders. ​

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Definitions:

Precautionary Motive

A theory explaining the demand for liquidity by individuals and firms as a safeguard against future cash needs and uncertainties.

Safety Margin

The difference between the actual value of a company's sales and the break-even sales, serving as a buffer for unexpected declines in revenue.

Financial Reserve

A portion of funds set aside by a business or organization to cover future obligations or unexpected expenses.

Zero-balance Accounts

Bank accounts that are maintained at a zero balance by automatically transferring funds from a master account in amounts only large enough to cover presented checks or debits.