Reserve Requirement Tax Is Defined As

question 42

Multiple Choice

Reserve requirement tax is defined as:

• A)the cost of holding reserves when the central bank pays no-or below market-interest on these balances
• B)the benefits of holding reserves when the central bank pays above market interest on these balances
• C)the tax paid on liquidating near-cash assets
• D)the tax benefit received from liquidating near-cash assets

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Definitions:

Inter Vivos Trust

A trust created by the grantor, settlor, and effective during the grantor’s lifetime – that is, a trust not established by a will.

Grantor

An individual or entity that creates a trust, transferring ownership of assets to the trust.

Beneficiary

A person or entity entitled to receive benefits or assets under a legal instrument, such as a will, trust, or insurance policy.

Trust

A fiduciary relationship in which one party, known as a trustee, holds the right to manage property or assets for the benefit of another party, the beneficiary.