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The Optimal Size of International Reserves Occurs for a Country

Question 2

Multiple Choice

The optimal size of international reserves occurs for a country at the point where the


A) total benefit of holding the reserves equals the total cost of holding the reserves.
B) marginal benefit of holding the reserves exceeds the marginal cost of holding the Reserves by the greatest amount.
C) marginal benefit of holding the reserves equals the marginal cost of holding the reserves.
D) marginal cost of holding the reserves is zero.

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