In the ATM model of the demand for cash
A)the amount that an individual withdraws is an exogenous variable while the probability of theft or loss is an endogenous variable.
B)the amount that an individual withdraws is an endogenous variable while the probability of theft or loss is an exogenous variable.
C)both the amount that an individual withdraws and the probability of loss and theft are exogenous variables.
D)both the amount that an individual withdraws and the probability of loss and theft are endogenous variables.

Question

Quizplus · Accepted Answer

In the ATM model of demand for cash, the amount that an individual withdraws is determined by endogenous factors such as the fees charged by the ATM, the individual's income, and transaction costs. In contrast, the probability of theft or loss is an exogenous variable that is outside of the individual's control. Thus, the amount withdrawn is an endogenous variable, whereas the probability of theft or loss is an exogenous variable.

In the ATM Model of the Demand for Cash