Multiple Choice
In the Baumol-Tobin model, if the nominal interest rate is 0.05, the cost of trips to the bank is $12, and expenditures equals $48,000, then average money holdings equal:
A) $980.
B) $2,400.
C) $3,394.
D) $4,000.
Correct Answer:
Verified
Correct Answer:
Verified
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