Which of the following is a reason people choose to hold more cash?
a) Interest rates paid on savings and checking accounts at the bank rise dramatically.
b) Consumers have more faith in the stability and safety of the financial system.
c) Interest rates paid on savings and checking accounts at the bank are near zero.
d) Holding cash becomes less convenient.
Ans: a) Interest rates paid on savings and checking accounts at the bank rise dramatically.
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