An Individual Spends $5 Daily and Also Spends an Additional

question 58

Multiple Choice

An individual spends $5 daily and also spends an additional $1.50 each time he goes to an ATM.There is also a 12 percent risk of having his cash lost or stolen.If his total cost of holding cash is (547.50/T) + (0.375 × T) , then what is the ongoing nominal interest rate in the economy? Assume that the individual visits the ATM once in every T days.

• A)1 percent.
• B)2 percent.
• C)3 percent.
• D)4 percent.

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Definitions:

Experiences

Pertains to events or occurrences personally encountered or undergone by an individual.

Sigmund Freud

He was an Austrian neuroscience expert who originated psychoanalysis, a cure for mental ailments involving dialogue between a psychoanalyst and their patient.

Rational

Thinking or reasoning based on logic or reason, often characterized by the ability to think critically and make sound judgments.

Unconscious

The part of the mind that contains thoughts, memories, and desires not within the immediate awareness of the individual.