According to the Baumol-Tobin transaction demand model, the amount of money balances held should increase as

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According to the Baumol-Tobin transaction demand model, the optimal level of money balances held is determined by the trade-off between the cost of holding money (in terms of foregone interest earnings) and the cost of making transactions (such as ATM fees or the time and effort required to go to the bank). As such, if the cost of transactions increases, individuals will want to hold more money balances to avoid these costs. The other options listed (A, B, D, E) do not directly relate to the Baumol-Tobin model.

According to the Baumol-Tobin Transaction Demand Model, the Amount of Money