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Reserves demanded varies a. inversely with both prices and output. b. inversely with prices and directly with output. c....

Reserves demanded varies a. inversely with both prices and output. b. inversely with prices and directly with output. c. directly with prices and inversely with output. d. directly with both prices and output.  

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d. directly with both prices and output.  

The reserves are directly with both prices and output.  

As the increase in reserves increases money supply which decreases interest rate and increases consumption which leads to increase in the aggregate demand that increases both price and output.

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