Problem
1. A nation's need for international reserves is similar to an individual's desire to hold cash balances. Explain.
2. What are the major factors that determine a nation's demand for international reserves?
3. The total supply of international reserves consists of two categories:
(a) owned reserves and
(b) borrowed reserves. What do these categories include?
4. In terms of volume, which component of world reserves is currently most important? Which is currently least important?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.