redsoxfan5000 Posted April 16, 2015 Share Posted April 16, 2015 My first thought was demand for money would decrease because people wouldn't want to give money to banks so they would just put more of their wealth in bonds. I realize people would put more money in currency but I wouldn't think that would offset the decrease in deposits. My friend argues that the increase in fees would lead to a higher demand for money because people would need more money to help cover the fees. Who is correct? Thank you Link to comment Share on other sites More sharing options...
Schwarzschild Posted June 3, 2015 Share Posted June 3, 2015 (edited) An increase in ATM fees would make consumers look for alternatives to paper money to use. The fees would be an incentive for people to use credit/debit cards; checks to pay bills, buy products. Also I'm not sure the fees would make consumers do such a drasting thing like buy bonds (there is no correlations between the two) and yes your friend is somewhat right in my opinion, probably the currency will appreciate a little (since there will be a bigger demand for it). Edited June 3, 2015 by Schwarzschild Link to comment Share on other sites More sharing options...
TheGrandmaster Posted June 5, 2015 Share Posted June 5, 2015 I doubt ATM fee increases would have any appreciable effect on the macroeconomy in the sense that overall demand for money could be affected. Bank holdings would not be affected - people would just swipe their card more often than extracting cash. Bank holdings are just as liquid with your atm card as they are with cash in a pragmatic sense. Link to comment Share on other sites More sharing options...
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