The opportunity cost of holding money is measured by the rate of interest.

Name: The opportunity cost of holding money is measured by the rate of interest.
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Question

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The opportunity cost of holding money is the potential return or benefits that could have been earned if the money had been invested or used for other purposes. The rate of interest reflects the potential return that could have been earned by investing the money, and therefore, it measures the opportunity cost of holding money.

The Opportunity Cost of Holding Money Is Measured by the Rate