The opportunity cost of holding money instead of an interest ...

[bobbie]

The opportunity cost of holding money instead of an interest earning asset is the
 
  A) inflation rate minus the real interest rate.
  B) inflation rate.
  C) real interest rate.
  D) nominal interest rate.
  E) inflation rate minus the nominal interest rate.

Question 2

As the real interest rate ________, the real investment spending ________.
 
  A) decreases; decreases B) increases; decreases
  C) increases; increases D) changes; does not change

[zogaridan]

Answer to Question 1

D

Answer to Question 2

B

[bobbie]

Excellent

[Viet Thy]

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