It Is Costly to Hold Money Because

question 208

Multiple Choice

It is costly to hold money because

• A)deflation may reduce its purchasing power.
• B)in doing so one sacrifices interest income.
• C)bond prices are highly variable.
• D)the velocity of money may decline.

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Definitions:

Travel Expenses

Costs associated with traveling for the purpose of conducting business-related activities, including transportation, lodging, and meals.

Spending Variance

The difference between the actual amount spent and the budgeted or standard amount expected to be spent.

Power Cost

The expense associated with the consumption of electrical power used in the operations of a business or manufacturing process.

Materials Quantity Variance

The difference between the actual amount of materials used in production and the standard amount expected to be used, multiplied by the standard cost per unit.