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Consider the model of currency and deposits in Chapter 11. The rate of return to capital is equal to 1.25, the rate of return to
Consider the model of currency and deposits in Chapter 11. The rate of return to capital is equal to 1.25, the rate of return to currency is equal to 1.1. When withdrawing deposits from a bank, workers have to pay a fixed cost of 5 units of the consumption good. Will a worker choose currency or deposits when he wants to save 20 units of the consumption good? Question 10 options: Not enough information. The worker will choose deposits. The worker will choose currency. The worker will be indifferent between currency and deposits
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