If a Checking Account Has an Interest Rate of 1

question 272

Multiple Choice

If a checking account has an interest rate of 1% and a Treasury bill has an interest rate of 2%, the opportunity cost of holding the checking account as money is:

• A) zero.
• B) 0.02%.
• C) 1%.
• D) 2%.

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Definitions:

Lower-order Need

Basic physiological and safety needs that individuals seek to fulfill before addressing more complex desires or psychological aspects.

Higher-order Need

Advanced psychological needs that go beyond basic physical requirements, such as social belonging, esteem, and self-actualization, according to Maslow's hierarchy.

Maslow's Needs

A hierarchy of human needs proposed by Abraham Maslow that describes motivational factors from basic physiological needs to self-actualization.

Direction

Guidance or supervision provided to perform tasks or to make decisions and progress in activities or objectives.