Reference no: EM131132144
ATMs and credit cards
This problem examines the effect of the introduction of ATMs and credit cards on money demand. For simplicity, let's examine a person's demand for money over a period of four days. Suppose that before ATMs and credit cards, this person goes to the bank once at the beginning of each four-day period and withdraws from her savings account all the money she needs for four days. Assume that she needs $4 per day.
a. How much does this person withdraw each time she goes to the bank? Compute this person's money holdings for days 1 through 4 (in the morning, before she needs any of the money she withdraws).
b. What is the amount of money this person holds, on average? Suppose now that with the advent of ATMs, this person withdraws money once every two days.
c. Re-compute your answer to part (a).
d. Re-compute your answer to part (b). Finally, with the advent of credit cards, this person pays for all her purchases using her card. She withdraws no money until the fourth day, when she withdraws the whole amount necessary to pay for her credit card purchases over the previous four days.
e. Re-compute your answer to part (a).
f. Re-compute your answer to part (b).
g. Based on your previous answers, what do you think has been the effect of ATMs and credit cards on money demand?
Estimate of the difference in height between boys and girls
: What is the unbiased estimate of the difference in height between boys and girls? Provide a formula and check the unbiasedness. Calculate the value of this estimate for the given sample
|
How will you balance your commitment to science
: How will you balance your commitment to science as a researcher with your obligations and ethical responsibilities as an anthropologist?
|
How they inform us about modern life
: This list of questions is not exhaustive and you can come up with questions that combine dimensions (for example, does the arrangement of material culture [space] tell you something about the sequence or duration of its use [time]?)
|
Describe circumstances appropriate to deviating from plan
: Discuss specific techniques, including metrics and milestones that the Human Resources Department/Division can use to add rigor in achieving this balance while attaining long-term business objectives for the overarching needs of the organization.
|
The effect of the introduction of atms and credit cards
: Re-compute your answer to part (b). Finally, with the advent of credit cards, this person pays for all her purchases using her card. She withdraws no money until the fourth day, when she withdraws the whole amount necessary to pay for her credit c..
|
What is the demand for central bank money
: What is the impact on the interest rate if central bank money is increased to $300 billion?
|
Compute the economic order quantity
: Master Hatter's demand for hats is 4000 per year. The order cost is $25 and the carrying cost is 15% of the price paid to the supplier. The cost paid to supplier is $12 per unit. Compute the Economic Order Quantity. The supplier has indicated that Ma..
|
What does it mean to prove something in mathematics
: What does it mean to prove something in mathematics? How is this different from in real life? Give an example of something you've had to prove in your own life. What evidence did you provide to support your reasoning? What strategies did you use ..
|
What assumptions should a valid iv satisfy in this case
: You would like to estimate the effect of police size on city-level crime on a cross-section of cities. Does the estimated 0 coefficient mean that police size has no effect on crime? What assumptions should a valid IV satisfy in this case
|