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Practice mode Money, Interest Rates And Output

Which of these is NOT a function of money?

Correct answer A. Hedge against inflation

Explanation

Money’s functions are medium of exchange, unit of account and store of value; it does not protect against inflation, because inflation erodes its purchasing power.

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Question 02 Money, Interest Rates And Output

Banca Solida has always kept a reserve ratio of 25 percent. It is taken over by Gung-Ho Bank, which keeps a reserve ratio of 12.5 percent. If Banca Solida adopts its new owner’s practices, what happens to the money supply in its country?

Correct answer D. Money supply will increase because Banca Solida will increase its loans

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