The opportunity cost of holding money balances rather than holding other assets is
A) the nominal interest rate.
B) the price level.
C) forgone consumption.
D) forgone liquidity.

Question

Quizplus · Accepted Answer

The opportunity cost of holding money balances instead of other assets is the nominal interest rate, as this represents the interest income forgone by not investing in interest-bearing assets.

The Opportunity Cost of Holding Money Balances Rather Than Holding