The ________ of holding money is measured by the interest yield that could have been earned by holding some other asset.

Question

Quizplus · Accepted Answer

The concept of opportunity cost refers to the value of the next best alternative foregone. In the context of holding money, the opportunity cost is the potential yield that could have been earned if the money was invested in some other asset, such as stocks or bonds. This yield represents the benefit that is forgone by holding money instead of investing it, and is therefore a key consideration in determining the demand for money.

The ________ of Holding Money Is Measured by the Interest