According to Liquidity Preference Theory,the Opportunity Cost of Holding Money

question 46

Multiple Choice

According to liquidity preference theory,the opportunity cost of holding money is

• A)the interest rate on bonds.
• B)the inflation rate.
• C)the cost of converting bonds to a medium of exchange.
• D)the difference between the inflation rate and the interest rate on bonds.

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Definitions:

Behaviorist

A psychologist who studies and applies principles of behaviorism, a theory that focuses on observable behaviors and discards theories involving the mind.

Cognitive Neuroscientist

A scientist who studies the biological processes and aspects that underlie cognition, with a particular focus on the neural connections in the brain which are involved in mental processes.

Introspection

The process of self-observation concerning one's psychological and emotional patterns.

Freudian Psychologists

Professionals who apply Sigmund Freud's theories of psychoanalysis to understand human behavior and mental processes.