According to the Baumol-Tobin model, an increase in the fixed costs of going to the bank will the demand for money.
A)increase
B)decrease
C)not change
D)possibly increase or decrease

Question

Quizplus · Accepted Answer

The Baumol-Tobin model suggests that an increase in the fixed costs of going to the bank will lead to an increase in the demand for money, as individuals will prefer to hold more cash to reduce the frequency of bank visits.

According to the Baumol-Tobin Model, an Increase in the Fixed