Problem
a. Determine the optimal strategy for cash management for a person who earns $1,600 per month, can earn .percent interest per month in a savings account, and has a transaction cost of $1.
b. What is the individual's average cash balance?
c. Suppose income rises to $1,800. By what percentage does the individual's demand for money change?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.