The higher and more unpredictable the changes in the monetary unit, the
A)lower the opportunity cost of using it as a standard of deferred payment.
B)less likely barter exchange will replace it.
C)lower the opportunity cost of using it as a store of value.
D)higher the opportunity cost of using it as a store of value.
E)lower the opportunity cost of using it as a medium of exchange.

Question

Quizplus · Accepted Answer

When the value of the monetary unit is highly unpredictable, there is a higher opportunity cost of using it as a store of value because it may lose value rapidly. Therefore, people may choose to hold other assets such as gold or real estate instead of the currency.

The Higher and More Unpredictable the Changes in the Monetary