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Explain Why the Interest Rate Is the Opportunity Cost of Holding

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Explain why the interest rate is the opportunity cost of holding currency. What is the benefit of holding currency?


Definitions:

Motion Parallax

Monocular depth perception cue; the perception of motion of objects in which close objects appear to move more quickly than objects that are farther away.

Reversible

Describing a process or condition that can be returned to its original state or form without permanent damage.

Figure-Ground Effect

A visual perception principle that involves distinguishing a figure (object) from its background based on differences such as color, luminance, shape, or motion.

Figure-Ground Relationships

A principle in perception and visual communication that refers to the way humans visually separate objects (figures) from their surrounding background (ground) to understand what they see.

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