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People Who Expect a Very High Inflation Rate May

Question 12

Multiple Choice

People who expect a very high inflation rate may


A) prefer to hold goods instead of money
B) decrease the speed with which they spend their money, thereby decreasing velocity
C) shift their money from time deposits to demand deposits
D) increase their demand for real money balances in order to be able to purchase higher-priced goods later
E) none of the above

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