What is the opportunity cost of holding money?
Homework Answers
a) "B"
this will increase the nominal interest rate by 2% and the inflation will increase by 2%,the real interest rate will remain as it was.
b) the opportunity cost of holding the money is the real interest rate that the money could have earned if kept in the bank. The answer is "C".
c) "D"
The relative prices of the goods are never distorted.
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What is the opportunity cost of holding money?
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i
dont know how to do #12 or #13
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i
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Solve and show all work for all questions posted for a rating.
Thank you.
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