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The opportunity cost of holding money is the nominal interest rate.

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16y ago

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Is the opportunity cost of money equal to its direct cost?

no


What do you understand by the term opportunity cost?

Opportunity cost is what you give up in order to get something else. Paying money is the opportunity cost for ice cream for example.


Give a example of an opportunity cost that an accountant might not count as a costwhy would the accountant ignore this cost?

An opportunity cost where money does not change hands does not count as a cost. An example of this is the owner's opportunity cost for an alternate employment, since money does not change hands.


Opportunity cost of saving?

opportunity cost of saving is when you save money then economically spend from your saving this may vary to what person you are


How does cost different from opportunity?

"cost" represents the money paid for something and "opportunity cost" is the value of the thing given up when one chooses something else.


What is opportunity cost and can you provide an example of how it applies in decision-making?

Opportunity cost is the value of the next best alternative that is forgone when a decision is made. For example, if you choose to spend money on a vacation, the opportunity cost is the potential investment or savings you could have made with that money instead.


Can you explain the concept of opportunity cost using a money analogy?

Opportunity cost is like choosing between spending money on a new phone or a vacation. If you pick the phone, the cost is not just the price of the phone, but also the missed opportunity to go on vacation. So, the opportunity cost is the value of the next best alternative that you give up when making a decision.


How does cost differ from opportunity costs?

"cost" represents the money paid for something and "opportunity cost" is the value of the thing given up when one chooses something else.


When interest rates on Treasury bills and other liquid financial assets are high the opportunity cost of holding money is so thin government spending cause interest rates to?

high and low


Is an investment an implicit cost?

Yes, investment is an implicit cost because it is a firm investing their own money in something that (by definition of an opportunity cost) could have been invested in something else. Investment is the opportunity cost of a firm using their own money, and whether or not the opportunity that the firm invested in is worthwhile is defined by the NROR (the normal rate of return).


Does an opportunity cost have value?

opportunity cost can have a value, especially if you are looking at such things as the college/job thing. If you go to college rather than take a job, your opportunity cost is the amount of money you lose from not working at the job. Opportunity cost does not always have to have a value. Again with the college/job example, if you take a job rather than go to college, your opportunity cost can be things like more education and college memories, etc. Opportunity cost is simply "what you give up". Therefore, if you are giving up money, your opportunity cost has a monetary value. If you are giving up education or experience or the like, your opportunity cost technically has no monetary value, but you are still giving something up. Hope that answers the question.


How can one determine the holding cost for a product or inventory?

The holding cost for a product or inventory can be determined by calculating the expenses associated with storing and maintaining the inventory, such as storage space, insurance, depreciation, and opportunity cost of tying up capital in inventory.