The Optimal Size of International Reserves Occurs for a Country

question 24

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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