jaymartijay3338 jaymartijay3338
  • 03-01-2020
  • Business
contestada

At a ________ interest rate people would hold more funds in cash since the opportunity cost of having cash is low..

Respuesta :

Maysara Maysara
  • 04-01-2020

Answer:

low

Explanation:

The opportunity cost of having cash is the amount that we can earn from the interest of the deposited funds. If the interest rate is low, the earning from depositing money will not enough to buy goods that more expensive in the future due to inflation. Thus, it is better to hold cash to buy things at present when the prices have not gone up yet.

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