People Choose to Hold a Smaller Quantity of Money If

question 10

Multiple Choice

People choose to hold a smaller quantity of money if

• A)the interest rate rises, which causes the opportunity cost of holding money to rise.
• B)the interest rate falls, which causes the opportunity cost of holding money to rise.
• C)the interest rate rises, which causes the opportunity cost of holding money to fall.
• D)the interest rate falls, which causes the opportunity cost of holding money to fall.

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Definitions:

Wages

Payments made by employers to employees, usually at hourly, daily, or piecework rates, for the labor or services provided.

Source Of Cash

Activities or transactions that increase the available cash in an organization, such as sales, issuing bonds, or taking out loans.

Lost Customer Goodwill

Refers to the adverse impact on a company's brand reputation or customer loyalty due to negative experiences or dissatisfaction.

Shortage Cost

Costs incurred when demand exceeds supply, leading to inventory shortfalls, lost sales, and potential damage to customer satisfaction.