Mary has $1,000 and is considering purchasing a $1,000 bond that pays 7 percent interest per year.Mary decides not to buy the bond and holds the $1,000 as cash.If the inflation rate is 4 percent, the opportunity cost of holding the $1,000 as money is
A) $30.00.
B) $40.00.
C) $70.00.
D) $110.00.
E) $100.00.
Correct Answer:
Verified
Q5: The opportunity cost of holding money is
Q6: When the opportunity cost of holding money
Q7: The lower the nominal interest rate, the
A)
Q8: The quantity of money demanded is
A) the
Q9: The relationship between the nominal interest rate,
Q11: The opportunity cost of holding money is
Q12: Suppose you can earn 5 percent on
Q13: The opportunity cost of holding money instead
Q14: The opportunity cost of holding money is
Q15: The real interest rate equals the
A) nominal
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents