In our example of the inventory approach, we started with income of $3,000, an interest rate of .01, and fees of $15 per transaction. We asked what happens if income increases to $12,000 while fees and interest rates stay constant. However, in one interpretation the fees on transactions are the cost to the individual of the time and effort expended in going to the bank and switching funds from savings into money in the form of currency or check¬ able deposits. This opportunity cost of time may be proportional to income. Thus, if the fee is $15 when income is $3,000, it should be $60 when income In our example of the inventory approach, we started with income of $3,000, an interest rate of .01, and fees of $15 per transaction. We asked what happens if income increases to $12,000 while fees and interest rates stay constant. However, in one interpretation the fees on transactions are the cost to the individual of the time and effort expended in going to the bank and switching funds from savings into money in the form of currency or check¬ able deposits. This opportunity cost of time may be proportional to income. Thus, if the fee is $15 when income is $3,000, it should be $60 when income