Economics - Economics Section 2
46. To act as a liberating medium of exchange, money should least likely be:
- Option : B
- Explanation : Money should be difficult to counterfeit for it to act as a liberating medium of exchange.
- Option : C
- Explanation : The increase in money from an additional deposit in the banking system = new deposit / reserve requirement = $100 / 0.08 = 1250.
49. The speculative demand for money refers to the demand to hold money:
- Option : C
- Explanation : Speculative demand for money relates to the demand to hold speculative money balances based on the potential opportunities or risks that are inherent in other financial instruments.
50. If the expected return on other assets fall, the speculative demand for money will:
- Option : A
- Explanation : If the expected return on other assets falls, then the opportunity cost of holding money also falls and can, in turn, lead to an increase in the speculative demand for money.
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