According to the Baumol-Tobin demand for money:
a. if interest rates increase by 5 percent, what happens to the demand for money? (Give a specific numerical answer.)
b. if income increases by 5 percent, what happens to money demand? (Give a specific numerical answer.)
c. how does the inability of people to make fractional trips to the bank (e.g., one-half of a trip) alter the predicted income and interest rate elasticities?

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The Answer of According to the Baumol-Tobin demand for money:
a. if interest rates increase by 5 percent, what happens to the demand for money? (Give a specific numerical answer.)
b. if income increases by 5 percent, what happens to money demand? (Give a specific numerical answer.)
c. how does the inability of people to make fractional trips to the bank (e.g., one-half of a trip) alter the predicted income and interest rate elasticities?

According to the Baumol-Tobin Demand for Money