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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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