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<blockquote data-quote="Sitti" data-source="post: 2534527" data-attributes="member: 865301">and credit cards? on money demnad. For simplicity,let us examine a person&#039;s demand for money over a period of six days.suppose taht before ATM and credit card,this person goes to the bank once at the beginning of each six day period and withdraw from his saving account all the money he needs for six day.a.how much does he withdraw each time he goes to the bank? compute this person&#039;s money holding for days 1 through 6 ( in morning,before he spends any of the money he withdraw ).b.what is the amount of money he holds on average? suppose now that with the advent of ATM,he withdraw money once every three days.c.REcompute your answer to part (a)d.recompute your answer to part (b)finally,with the advent of credit cards,this person pays for all his purchases using his card. He withdraw no money until the sixth day,when he withdraws the whole amount necessary to pay for his credit card purchases over the previous six days.e.recompute your answer to part (a)f.recompute your answer to part (b)g.based your answers to parts(b), (d), and (f), what has been the effect of ATM and credit cards on money demand?</blockquote>

[QUOTE="Sitti, post: 2534527, member: 865301"] and credit cards? on money demnad. For simplicity,let us examine a person's demand for money over a period of six days. suppose taht before ATM and credit card,this person goes to the bank once at the beginning of each six day period and withdraw from his saving account all the money he needs for six day. a.how much does he withdraw each time he goes to the bank? compute this person's money holding for days 1 through 6 ( in morning,before he spends any of the money he withdraw ). b.what is the amount of money he holds on average? suppose now that with the advent of ATM,he withdraw money once every three days. c.REcompute your answer to part (a) d.recompute your answer to part (b) finally,with the advent of credit cards,this person pays for all his purchases using his card. He withdraw no money until the sixth day,when he withdraws the whole amount necessary to pay for his credit card purchases over the previous six days. e.recompute your answer to part (a) f.recompute your answer to part (b) g.based your answers to parts(b), (d), and (f), what has been the effect of ATM and credit cards on money demand? [/QUOTE]

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