Use the following information for questions
Suppose there is one depositor who earns an income of $100 in each period.She spends $50 for consumption and the remainder goes to her savings account.Assume that a bank doesn't do anything with this money except safeguards it.The bank charges $5 for safeguarding fee.
-Suppose that there are two merchants who wish to borrow $100 at t = 0.There are five depositors who have the same pattern of income and consumption as in the original problem.How much can the bank promise to pay to the depositors in the aggregate if it does not pass along any profits it receives from the loan?
A)$50
B)$75
C)$155
D)$225
E)$245

Question

Use the following information for questions 
Suppose there is one depositor who earns an income of $100 in each period.She spends $50 for consumption and the remainder goes to her savings account.Assume that a bank doesn't do anything with this money except safeguards it.The bank charges $5 for safeguarding fee.
-Suppose that there are two merchants who wish to borrow $100 at t = 0.There are five depositors who have the same pattern of income and consumption as in the original problem.How much can the bank promise to pay to the depositors in the aggregate if it does not pass along any profits it receives from the loan?
A)$50
B)$75
C)$155
D)$225
E)$245

Quizplus · Accepted Answer

The Answer of Use the following information for questions 
Suppose there is one depositor who earns an income of $100 in each period.She spends $50 for consumption and the remainder goes to her savings account.Assume that a bank doesn't do anything with this money except safeguards it.The bank charges $5 for safeguarding fee.
-Suppose that there are two merchants who wish to borrow $100 at t = 0.There are five depositors who have the same pattern of income and consumption as in the original problem.How much can the bank promise to pay to the depositors in the aggregate if it does not pass along any profits it receives from the loan?
A)$50
B)$75
C)$155
D)$225
E)$245

Use the Following Information for Questions