The cost of holding money is

Question

Quizplus · Accepted Answer

Holding money has an opportunity cost, which is the interest foregone by not investing the money in another asset. Transactions accounts (A) are a type of bank account that allows for frequent withdrawals or deposits, but they do not necessarily have a cost of holding money. The liquidity approach (C) is a theory that emphasizes the importance of money as a means of payment and store of value but does not address the cost of holding money directly. Capital controls (D) are government regulations on the movement of capital into or out of a country and are not directly related to the cost of holding money.

The Cost of Holding Money Is