more frequent switching from bonds to money will result in a higher opportunity cost of holding money and lower money management costs. true or false.

Question

Reginald Atkinson

Business

30 January, 10:29

more frequent switching from bonds to money will result in a higher opportunity cost of holding money and lower money management costs. true or false.

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Answers (1)

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Jamison · Answer 1

False

Explanation:

In Economics, more frequent switching from bonds to money would not result in a higher opportunity cost of holding money and lower money management costs because on the average, individuals will have less money to hold. As a result of this, there would be a sharp decline or fall in their opportunity costs.

Also, as individuals make more business transactions, there would be a consequent increase or rise in their money management costs.

Hence, more frequent switching from bonds to money would result in a lower opportunity cost of holding money and higher money management costs.