In October of 2015, the nominal interest rate earned on money market accounts was around 0.20 percent. This interest rate is a measure of which of the following?
A) the opportunity cost of holding money
B) the inflation rate
C) the demand for money
D) the real interest rate

Question

Quizplus · Accepted Answer

The nominal interest rate on money market accounts or any other financial instrument represents the opportunity cost of holding money instead of investing it. It reflects the return foregone by keeping money in cash or in a non-interest-bearing account.

In October of 2015, the Nominal Interest Rate Earned on Money