Please answer both!! Thank you! The opportunity cost of holding a dollar is Ques
ID: 1173919 • Letter: P
Question
Please answer both!! Thank you!
The opportunity cost of holding a dollar is
Question 34 options:
the price of a government bond.
a dollar.
less than a dollar.
the interest yield that could have been earned by holding some other asset.
Thrift institutions
Question 35 options:
receive most of their funds from the public's savings deposits.
include commercial banks and investment firms.
do not offer transaction deposits.
include credit unions but not savings and loan associations.
the price of a government bond.
a dollar.
less than a dollar.
the interest yield that could have been earned by holding some other asset.
Explanation / Answer
34. (d) the interest yield that could have been earned by holding some other asset.
The cost of cash is the opportunity cost of holding cash in hands as opposed to contributing it. The exchange off between cash currently (holding cash) and cash later (contributing) relies upon, in addition to other things, the rate of interest that can be earned by contributing. A financial specialist with cash has two alternatives: to spend it at this moment or to spare it. The monetary pay for sparing it as against spending it is that the cash esteem will accumulate through the progressive accrual that he will get from a borrower (the financial balance or interest in which he has the cash).
35. (a) receive most of their funds from the public's savings deposits.
Thrift institutions can be reffered to as savings banks. And savings banks recieve most of their funding from the public's deposit that the public have been saving.