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ACTIVIST POLICY: Government policies that involve explicit actions designed to achieve specific goals. A common type of activist policy is that designed to stabilize business cycles, reduce unemployment, and lower inflation, through government spending and taxes (fiscal policy) or the money supply (monetary policy). Activist policies are also term discretionary policies because they involve discretionary decisions by government. A contrast to activist policy is automatic stabilizers that help stabilize business cycles without explicit government actions.

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FRACTIONAL-RESERVE BANKING: A system in which banks keep less than 100 percent of their deposits in the form of bank reserves and use the rest for interest-paying loans. Banks in the good old U. S. of A., as well as those in most other modern countries, practice this system of fractional-reserve banking.

     See also | bank | bank reserves | money supply | money creation | bank panic | Federal Reserve System | Federal Deposit Insurance Corporation | Great Depression | reserves | vault cash | Federal Reserve deposits |


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FRACTIONAL-RESERVE BANKING, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2022. [Accessed: January 23, 2022].


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ALLOCATION

The process of distributing resources for the production of goods and services, and of distributing goods and services for the satisfaction of wants and needs and human consumption. This allocation process is an essential part of an economy's effort to address the problem of scarcity.

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