The price of money is the nominal interest rate.
Holding money involves forgoing the opportunity to earn interest.

Question

Quizplus · Accepted Answer

Holding money in cash or in a non-interest bearing account means that the individual is not earning any interest on that money. Therefore, by holding money, the individual is forgoing the opportunity to earn interest. The nominal interest rate represents the price of borrowing money or the return earned on lending money, and is the cost of forgoing the opportunity to hold money.

The Price of Money Is the Nominal Interest Rate