Which of the following causes the opportunity cost of holding money in the form of cash to decrease?
A)Lower interest rates.
B)Higher short-term yields.
C)Higher reserve requirement.
D)Higher long-term yields.

Question

Quizplus · Accepted Answer

Lower interest rates decrease the opportunity cost of holding money in the form of cash because the return on other asset types (stocks, bonds, etc.) is lower, making cash a relatively better option.

Which of the Following Causes the Opportunity Cost of Holding