7.2. Suppose the intermediation of capital goods costs φ units of the consumption good for each…


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7.2. Suppose the intermediation of capital goods costs φ units of the consumption good for each… 1 answer below » 7.2. Suppose the intermediation of capital goods costs φ units of the consumption good for each unit of capital intermediated ( φ 0 . 5). Assume that transaction costs occur when agents withdraw from banks (when they are middle-aged). What will the equi- librium rate of return offered by intermediaries be if they are the ones who bear the transaction costs? For what value of φ , X , z , and n will fiat money be valued in this economy? Nov 16 2015 01:10 PM

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