Consider an economy in which there are 100 workers. One-half of the workers are endowed with 200 units of the consumption good when young and nothing when old. The remaining workers are endowed with 20 units of the consumption good when young and nothing when old. Each worker saves 30 percent of their endowment when young. Let the gross real return on capital by 1.25. Money supply grows according to the following rule: = 1.11. Assume that each worker uses 10 goods to identify themselves and make a withdrawal from a bank.

1. For all the agents, compute the return on money.

2. For the high-income worker, compute the return on deposits.

3. For the low-income worker, compute the return on deposits

4. Based on the answers above, what store of value should a high-income worker choose?

And the low-income worker?