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    Question

    How do expected inflation and changes in payment

    technology affect money demand?
    A Expected inflation increases money demand, and improvements in payment technology decrease money demand. Correct Answer Incorrect Answer
    B Expected inflation decreases money demand, and improvements in payment technology decrease money demand. Correct Answer Incorrect Answer
    C Expected inflation increases money demand, and improvements in payment technology increase money demand. Correct Answer Incorrect Answer
    D Expected inflation has no effect on money demand, and improvements in payment technology increase money demand. Correct Answer Incorrect Answer

    Solution

    The correct answer is B

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