The cost of holding money in the form of cash is

Question

Quizplus · Accepted Answer

The cost of holding money in the form of cash is equal to the interest you would have received at the bank or other investment alternatives, as you are foregoing the potential opportunity to earn interest or returns on that money. This is known as the "opportunity cost" of holding cash. Therefore, option C is the correct answer. Options A, B, and D are incorrect as the cost of holding money is not negative, is considered by economists and noneconomists alike, and is not non-existent.

The Cost of Holding Money in the Form of Cash