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Discuss how the following may affect the demand for monetary base: (a) Because of high inflation, people start to use foreign currency for large payments.

Discuss how the following may affect the demand for monetary base:

(a) Because of high inflation, people start to use foreign currency for large payments.

(b) Because of financial uncertainty, banks start to hold more money in their accounts in the payment system.

(c) It becomes possible to pay with credit cards on buses and trains.

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