3.2 - Demand for Money and Supply of Money
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Practice Questions
Test your understanding with targeted questions
What is the demand for money?
💡 Hint: Think about what people need money for.
What are the two main components of money supply?
💡 Hint: Consider what people use to make transactions.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What primarily influences the demand for money?
💡 Hint: Consider why people would need money.
True or False: Higher interest rates decrease the opportunity cost of holding money.
💡 Hint: Think about the trade-offs of holding cash versus investing it.
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Challenge Problems
Push your limits with advanced challenges
Given a 10% reserve requirement, if a bank has deposits of $1,000, what is the maximum amount it can lend?
💡 Hint: Calculate how much is held back based on the reserve requirement.
Discuss the potential economic effects of a central bank increasing the money supply drastically.
💡 Hint: Think about the balance between supply and demand in economic contexts.
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