2006-08-03 04:15:28 · 3 answers · asked by Carista W 1 in Social Science ➔ Economics
What services are we talking about: checking accounts, savings accounts/CDs, loans?
Checking accounts have no noticeable elasticity of demand; consumer surveys repeatedly find that the choice of bank to keep a checking account in is largely dictated by the convenience of the bank's location.
As to CDs and loans, elasticity of demand, being a micro-level concept, is not the best concept to apply to those products; you need to learn about IS-LM and how interest rate affects saving and investment on a macro level.
2006-08-03 06:39:00 · answer #1 · answered by NC 7 · 0⤊ 0⤋
If you are talking about a single bank then they are very elastic. Also it depends on the services that you are talking about. Are you talking backroom or on the retail end? In the back end with the institution of "check 21" the check scanning service will disappear and also the related cost of transportation of paper.
On a whole services are somewhat elastic. World wide banking in the future will have to move to being a 24hour operation. Global demand will require it. Forex markets will require it.
2006-08-03 04:25:21 · answer #2 · answered by Today is the Day 4 · 0⤊ 0⤋
Is this a homework question?
Demand elasticity often has a lot to do with the price. If the good is really cheap, raising the price by a large percent won't affect the quantity demanded much. If it's more expensive, demand tends to be less responsive.
Is that a good enough hint?
2006-08-03 17:12:12 · answer #3 · answered by WhiteMick 2 · 0⤊ 0⤋