🚀 go-pugleaf

On 20 Apr 1996 00:43:21 GMT, mlynek@chem.wisc.edu (Peter Mlynek)
wrote:

>Bill Funk <skypilot@starlink.com> wrote:
>
>> Peter Mlynek wrote:
>> > If the fees for transactions do rise, this would result in greater
>> > propensity to take out cash in larger amounts, which would decrease the
>> > velocity of money.  Ceteris paribus, this lowering of velocity would
>> > have negative impact on the ecomony.  Can anyone explain why this is
>> > (assuming my reasoning is correct)?
>>
>> ==========
>> I'm not saying I'm versed in macroeconomics, but here goes:
>> This taking out larger amounts of money for each transaction doesn't seem
>> to change anything except the frequency of use of the ATM. There's no
>> correlation with how that money is spent, is there?
>
>Yeah, that's what I, and pretty much everyone in the class, thought, but it
>ain't that simple.  If you take $50 out each week vs $200 once every 4
>weeks, you are spending about the same amount.  But, assuming that you
>spend it evenly over the course of the period that you hold the money, you
>have an average of $25 if you take it out weekly, or you have an average of
>$100 if it is every 4 weeks.  The fact that people would be holding more
>money in cash (in the matress, or wallets) if the fees per transaction
>rise, would have some sort of an impact on the money supply, on the
>economy, etc.  But I don't really know for sure how it works..... :(
>
>--Peter Mlynek
Simple don't use either Nationsbank or First Union ATM's if you don't
have an account there!


I pray that the bozo's who propoed these usage fees get replace by a
machine!