In the ATM model, the demand for money depends on
A)the nominal interest rate and the money supply.
B)the nominal interest rate and the ongoing rate of inflation.
C)the nominal interest rate, the cost of obtaining cash, the probability of loss or theft, and the money supply.
D)the nominal interest rate, the cost of obtaining cash, the probability of loss or theft, and the amount of spending.

Question

Quizplus · Accepted Answer

The ATM model of money demand includes factors like the nominal interest rate, costs associated with obtaining cash (such as ATM fees or the time spent going to the bank), the risk of losing money or having it stolen, and the total amount of spending a person plans to do. These factors influence how much cash individuals choose to hold.

In the ATM Model, the Demand for Money Depends on