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Macroeconomics 12th Edition by Rudiger Dornbusch ,Stanley Fischer,Richard Startz
Edition 12ISBN: 978-1259070969Macroeconomics 12th Edition by Rudiger Dornbusch ,Stanley Fischer,Richard Startz
Edition 12ISBN: 978-1259070969 Exercise 10
The next two questions are related to the material in the appendix.
a. Determine the optimal strategy for cash management for a person who earns $1,600 per month, can earn.5 percent interest per month in a savings account, and has a transaction cost of $1. ( Hint: Integer constraints matter here.)
b. What is the individual's average cash balance
c. Suppose income rises to $1,800. By what percentage does the individual's demand for money change
a. Determine the optimal strategy for cash management for a person who earns $1,600 per month, can earn.5 percent interest per month in a savings account, and has a transaction cost of $1. ( Hint: Integer constraints matter here.)
b. What is the individual's average cash balance
c. Suppose income rises to $1,800. By what percentage does the individual's demand for money change
Explanation
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The Baumol-Tobin transaction demand mode...
Macroeconomics 12th Edition by Rudiger Dornbusch ,Stanley Fischer,Richard Startz
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