Which of the following causes the opportunity cost of holding money in the form of cash to decrease?
A)Lower interest rates.
B)Higher short-term yields.
C)Higher reserve requirement.

Question

Quizplus · Accepted Answer

Lower interest rates reduce the opportunity cost of holding money in the form of cash because there are fewer returns available from alternative investments. Higher short-term yields and reserve requirements both increase the opportunity cost of holding money in the form of cash.

Which of the Following Causes the Opportunity Cost of Holding